Balanced Budget - How to Balance the Federal Budget Now

Balanced Budget Plan - U.S. Economy

The United States is currently running huge budget deficits. Current plans to balance the budget are totally insufficient. Worse yet, the economy is so addicted to the easy money created by federal spending that it will contract as the government begins to reduce excess spending. This will actually result in less tax receipts.

The federal government is like a morbidly obese man with hypoglycemia eating several pounds of junk food every day and then trying to lose weight by switching to a diet soda. It just doesn't work. He then tries to cut his calorie intake below his caloric expenditures. This results in low blood sugar and a lowered metabolism. His body thinks it is starving and he still can't lose weight. At this point, drastic measures are needed. He needs to go on a near fast with absolute minimum calories to return to a healthy weight. Once he is at a healthy weight, then he can switch to a balanced diet.

Increasing taxes will actually slow the economy down and actually result in less revenue as wealth moves to less usurious countries. The only way to save the United States is to drastically reduce federal spending and create a balanced budget.

Here is what we need to do now to balance the budget:

  • Eliminate Medicare and Medicaid: Health care should be dealt with at the state level where local governments can determine the specific care needed for their area. This would eliminate a huge amount of waste and fraud. It would also create a set of competing markets between states. State governments would learn better ways to manage health care needs by observing other states and adopting the best models.
  • Close Foreign Bases: The world has changed a lot since many of these foreign bases were built. Our military is currently capable of dealing with any threat without the need for these bases.
  • End War on Drugs: We spend billions of dollars every year on this war. It wastes a huge amount of resources. Worse yet, we often end up supporting the families of those locked up. We should not only end the war on drugs, but pardon everyone convicted of a drug related offense and release them. We could close half of our federal prisons. This would also add over a million potential workers to the population. It would get many of their families off welfare.
  • Eliminate ATF and DEA: Ending the war on drugs would eliminate the need for the DEA. Alcohol and tobacco regulation would be turned over to the states. Firearm regulation would be turned over to the FBI.
  • Eliminate Redundant Programs: There are myriads of federal programs and subsidies that should be transferred to the states. Most of these programs could be ran more efficiently at the state level.
  • Eliminate Federal Student Loans and Grants: This program probably paid for itself in the past with increased tax revenue, but it is obsolete now. The excess money is only making college more expensive as students compete with more money. Shady trade schools take advantage of the easy money, leaving their students without marketable skills.
  • Eliminate Federal Pensions: The problem with pensions is that they produce unknown liabilities. They make promises based on a far unknown future. Worse yet, they create a favored social class with superior retirement plans. Simply eliminate them and transfer their funding to the social security department. Current employees would begin paying social security. Federal retirees should collect social security like everyone else. If they want a better retirement, then they should invest part of their earnings in a private plan.

Social Security would be left alone since it is theoretically solvent with its huge trust fund. The food stamp program would prevent starvation and allow people to survive the necessary years of hardship until the economy recovers.

These budget cuts would cause pain for a while, but they are needed to remove the sickness that is pervading our economy. The private sector would begin to take over these functions that were originally dealt with inefficiently by the federal government. State budgets would get healthier and any problems that the free market can't solve could be solved at the local level.

Economic pain is in our nation's future. It is inevitable. Our nation must decide whether to endure it now or to endure much worse years later.

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Comments 14 comments

JON EWALL profile image

JON EWALL 5 years ago from usa

Pente

I apologize for the broken link, I was unaware that it was removed. Nothing will happen to Medicare for those now presently in Medicare. The Medicare program changes proposed don't take effect for 10 years. Obama and the Democrats are not telling the whole story about the Ryan budget. Also take note that the Ryan budget without the repeal of Obamacare will not work as presented. President Obama has said that he will not sign a bill that repeals Obamacare. The Democrats control 2/3 of the government, in order to override the presidents veto, the Republicans need 60 votes in the Senate. Looks like the Republicans have only one move, that’s not to vote to raise the National Debt limits. If they are successful, Obama & co. will be forced to pay the debtors from unused approved funds, his slush fund for the 2012 elections.


nicomp profile image

nicomp 5 years ago from Ohio, USA

CHRIS57 Wrote:

"Looking into Wikipedia i was amazed to see how small the corporate contributions are, compared to personal income taxes."

Good. Corporations should pay no taxes. Every corporate tax is a hidden tax and is a reduction in salaries, benefits and investments that companies can pay.


Pente profile image

Pente 5 years ago from Planet Earth Author

My first thought is that I hate it when people use broken links on a comment, especially since hubpages doesn't allow editing.

Regardless, it was easy to find recent news on Paul Ryan, and I see that he has made a real suggestion for reducing the budget deficit.

My less healthy friends scream at the suggestion that medicare and medicaid be reduced. I actually think they should be flat eliminated. As for my friends, over 90% of their health problems are self-inflicted. STOP SMOKING AND DRINKING. Get some exercise!


JON EWALL profile image

JON EWALL 5 years ago from usa

Pente

You said ''Our nation must decide whether to endure it now or to endure much worse years later.''

Today on Fox Sunday was a great program that clearly, if that is possible, helps answer questions regarding your hub.

RYAN TELLS IT THE WAY IT IS!

http://www.foxnews.com/on-air/fox-news-sunday/inde

YOUR THOUGHTS PLEASE


AnnCee profile image

AnnCee 5 years ago from United States

Maybe a good governor will seek the top job and kick some ***.


Pente profile image

Pente 5 years ago from Planet Earth Author

Yes, we have to make hard choices, and the sooner the better. Unfortunately, I don't think most politicians have the internal strength to even talk about them, much less actually make them.


AnnCee profile image

AnnCee 5 years ago from United States

Good stuff. Hard choices for hard times. Patty cakes isn't going to cut it.


Pente profile image

Pente 5 years ago from Planet Earth Author

Corporate taxes just get passed onto consumers. However, we should stop subsidizing corporations. As for personal sacrifice, I would be willing to give up any subsidies that I get from the government if they also eliminated all other subsidies. Individuals should care for themselves or rely on charity, not the government. I am okay with social security, although it should never have been started, but unfortunately people paid into it their entire lives expecting to rely on it for retirement. I wrote a hub on an ingenious way to save it.


CHRIS57 profile image

CHRIS57 5 years ago from Northern Germany

One thing is cuts on spending. What about increasing revenues?

Looking into Wikipedia i was amazed to see how small the corporate contributions are, compared to personal income taxes.

On the spending side i did not find a hint of where the interest payments are hiding for the 14 something trillions accumulated depts. The 200 Billions can´t be it.

Roughly overlooking your proposals, the majority of the cuts are linked to personal sacrifices. Anyhow all proposed cuts will charge a high political price.

Is anyone - political leaders, taxpayers, pensioners .. - willing to pay the price?


Mr Tindle profile image

Mr Tindle 5 years ago

Yeah, that would probably be the correct move. That would put the axe to costly and damaging farm subsidies as well.

I think we should get rid of all foreign aid too.


Pente profile image

Pente 5 years ago from Planet Earth Author

I like that idea. It would be nice if we could expand that constitutional amendment to disallow any type of aid to private business.


Mr Tindle profile image

Mr Tindle 5 years ago

Pente,

Good hub with good ideas to start balancing the federal budget. A constitutional ammendment prohibiting bailouts for supposedly "Too Big To Fail" institutions is probably also needed.


Pente profile image

Pente 5 years ago from Planet Earth Author

Thanks for your input. You are probably correct in that our nations problems are political. I think we will have to have a total economic collapse before people realize that we can't have everything without consequences.


Freeway Flyer profile image

Freeway Flyer 5 years ago

I agree that drastic steps need to be taken. The defense department is extremely wasteful, and significant amounts of money can be saved without really harming national security. Proposing defense cuts, however, opens a politician up to being criticized as either soft or even anti-American. Medicare in its current form is clearly unsustainable. The elderly, however, are the most powerful lobby in the United States, so good luck shutting it down. You would also need to come up with a way of making the transition you propose from the federal to the state level. The war on drugs, I agree, has higher costs than benefits. If people really want to get high, they will find a way to do it, and jails are filled with petty offenders. But once again, good luck legalizing cocaine, heroin, and LSD.

The economics of cutting the budget is the easy part. The primary problem is political. Americans want to get something for nothing, and no one wants their particular piece of the pie to be the one getting cut. Also, issues such as drugs and military spending are very emotional, and politicians don't want to open themselves up to criticism. This is why politicians of both parties avoid laying out concrete ways to make a significant dent in spending.

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