Wednesday, June 29, 2011

Balancing the US budget

Those of you that have listened to me ramble here, on Twitter, or know me personally know that I am a fiscal conservative. I'm a small government guy and a capitalist. I think those two have been the path to growth, prosperity, freedom, and liberty. I think they will continue to be the path.

While this is true, I also fashion myself as a realist and pragmatic. It's the biggest check and balance there is to my more theoretical political views. It also muddles my stances on various issues. I'm a libertarian that believes in non-coercion, but I support public schools, infrastructure, and many social safety nets that many others do not. Those require taxes. I prefer something like the Fair Tax, but I accept our current progressive tax system as something that is unlikely to change.

With that background as a filter, I listened to this speech today by Sen. Bernie Sanders (I-Vermont):

I hear what he's saying. I completely agree that it's insane to take taxes and defense off the table when you're trying to balance the budget. I also agree that you can't gut programs cold turkey for the lower classes that they currently depend on. I'd even venture to say it would be immoral to do so.

What's the reality though? The Republicans will not allow the budget to be balanced by raising taxes on the upper classes and/or cutting spending on defense. It's dogmatic for them. The Democrats want to not only protect current social programs, but to increase them. This is not a good formula. Without a drastic change, the country will just need to keep borrowing until others won't loan money to it (us) any more.

My recommendation is:

1) The Democrats need to call the Republican bluff on the debt ceiling. Everybody knows that it has to be raised. The fight by the Republicans isn't whether to do it, but to see how much can be won before agreeing to it in the final hour. Tell them that unless taxes and defense are in a deficit reduction/balanced budget plan that you're not going to play.
2) Put everything on the table. All of our woes can't be solved by simply taxing the rich and cutting defense, while government programs continue to spend, spend, spend. It might seem that way, but there are real consequences to tapping the rich until the budget is balanced. Like it or not, the upper classes provide the jobs and the capital that drive the economy. The more you tap them, the more they'll just pass it on down the chain.
3) If we're going to drastically reform social programs, it needs to be in a graduated way over a good number of years so as to ween people off them.
4) Get out of our current wars and stop waging new ones unless there's a compelling national interest. We can't afford it!