Where should our economy go next, after the compromise agreement to increase the national debt limit?
The far left liberals of the Democratic Party still are pushing to have wealth redistributed to the bottom 50 percent of the nation’s population. The far right wing of the Republican Party wants no tax increases on anyone, regardless of wealth, even if they use loopholes to pay little or no tax. Politically and philosophically, the bipartisan compromise has pleased almost no one. As our economy tries to move forward, three important steps need to be taken.
The first step is to cut spending on government sponsored programs, earmarks, entitlements and services. We need to make government smaller, leaner and more nimble. Our government owes approximately 60 percent of its yearly budget in debt. Only Greece, Ireland, Spain, Italy and Portugal are deeper in debt than America at this time. Those foreign countries are very close to bankruptcy. Bankruptcy can happen to America, if we do not cut spending fast.
A lot of credit for spending cuts goes to tea party people, who were angry and organized a legitimate, credible effort to cut excessive spending by our government. They still feel not enough cuts have been made. They wanted to pull the plug on overspending, cutting spending on entitlements, health care, earmarks and government operations.
The downside of the tea party position is that huge cuts in government spending cannot be made quickly without causing widespread turmoil. Our country has obligations and commitments for services already provided or promised, on which many people depend. We need to make reductions in sensible ways.
A second step is to cap expenses to reduce the deficit. We must stop giving so much money to other countries. Our own people need the dollars that we are now sending overseas. We need to think of our own citizens before we send money abroad.
The bulk of our federal spending is in Medicare, Medicaid, Social Security and the military. Expenditures in these areas have gone up tremendously in the last decade. No adequate solution to our debt problems can be achieved until we cut back on each of these expenditures. Medicare, Medicaid and Social Security program reforms will be necessary. We must change some of the rules for our entitlement programs, if we want them to survive.
Military spending must also be reduced. We should leave Iraq, Afghanistan and Libya, and also eliminate many of our military air and land bases around the globe, such as those in Germany and Japan, which are unnecessary today. We should use our military budget to defend our country and protect our citizens from internal and external threats. We can do that better if we use our resources well.
The third step is balancing the budget. Oddly, a balanced budget has yet to be presented by the administration, in almost two years. It is a sad commentary on our debt situation, when we cannot see what cuts or revisions could take place on discretionary spending, facilities closings, payroll cutbacks, entitlement programs or military spending. Unless a balanced budget is made, we will not know what items to pay or if we have the monies to pay those obligations.
We need a balanced budget amendment to fix future fiscal planning. We must stop spending money that we do not have. A cap on our government’s spending is another solution for a balanced budget. There is a lot of concern still lingering over raising the debt limit. The jobless situation has not been addressed. Entitlement cuts have not been selected. Health care costs need to be reviewed. Many trillions of dollars more are needed to reduce the deficit itself. There are no winners in this situation.
The balanced budget will mean not spending more than we get in revenues. Spending cuts must balance incomes against expenses; otherwise, another recession is a real possibility, without job growth, without business growth or without time to get out of a terrible economy dilemma.
A special committee will be appointed to make sure that promised cuts and changes are being met. The special committee will consist of six members from each political party. When agreements are not produced, there will be a trigger, a form of a penalty, to take action when such an impasse occurs.
Our government needs its fiscal house in order. We must cut spending, cap expenses and balance the budget.
— Bernard Featherman is a business columnist for the Journal Tribune and former president of the Biddeford-Saco Chamber of Commerce.
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