It Might Happen- Strolling down the primrose path to “Deficit Reduction”

Dave Durand - Wednesday Contributor

We did it America! After all the partisan bickering and despite all the infighting between the establishment and freshmen congressmen, a deal was finally reached to raise the nation’s debt ceiling. We can confidently proclaim that the threat of default has been forever vanquished. The markets have been pulled back from a great precipice overlooking the abyss known as the double dip recession. America’s AAA rating will remain secure establishing our economy as the standard bearer for the civilized world.

Wait a minute. What’s that you say? The exact opposite has occurred? Get right out of town!

You mean there was never the great threat of default and a compromise to raise the debt limit was completely unnecessary? Are you actually telling me that the market plunged and erased all the gains made this year? I refuse to believe that you are sitting at home, staring at your computer, and screaming at top of your lungs that S&P has downgraded the American Debt after all this rigmarole.

I guess there is a first time for everything.

Despite the reality slap upside our collective heads, we can at least take solace in President Obama's words last week on the debt ceiling compromise. In his most promising and re-assuring tone, the president stated that the deal “will begin to lift the cloud of debt and the cloud of uncertainty that hangs over our economy”.  He also went on to add that “It will allow us to start reducing our deficit in a responsible way”.

But is President Obama right to be so optimistic? Are we on the path to reducing the daunting annual deficits we face? Will we finally tighten our belts as a people and make the hard choice to live within our means?

Well, in the immortal words of Wayne Campbell…

And why don’t I expect to see airborne monkeys anytime soon? Because there has never been a credible plan presented that will intentionally balance the US budget, thereby reducing the deficit allowing us to pay down the National Debt. Oh in case you missed it, out National Debt is now 100% of GDP. That’s European levels of debt. 

 Sacré Bleu!

I argue that we will never balance the federal budget with the current leadership in Washington DC. The Democrats along with President Obama insist on spending and taxing our way to prosperity. The Republicans insist on zero tax increases (I agree!) and spending our way, albeit at a slower pace, to prosperity. Both parties only flirt with the idea of even marginally reforming entitlements such as Social Security and Medicare. And if you add the impending deluge of retiring baby boomers and burdensome Obamacare legislation into the calculation, by 2050, the budget for entitlements will have more than doubled from 2005. These costs will literally equal the amount of “revenue” the federal government has historically taken in on average each year!

How can we afford this? Does anyone have a reasonable plan to set right our ship of state? Democrats? Republicans? Liberals? Conservatives? Tea Party Caucus? 

Bueller… Bueller… Bueller…?

How about the Tea Party favorite and budget hawk from Florida, Representative Connie Mack? His plan (H.R. 1848) is known as the "One Percent Spending Reduction Act of 2011".  The bill mandates cuts in federal spending (in real dollars) by 1% for every year until 2019 when the federal budget would then be balanced.

Wow. Sounds good right? Well consider this. By 2019 this plan reduces the federal budget to $3.184 Trillion. We were spending this amount 2 years ago!

So this plan, which is criticized by opponents as draconian and disregarded as “extreme”, takes 7 years to roll back the spending we have incurred since 2009. All the while, we will go deeper and deeper into debt as the budget slowly balances. I applaud the effort, but this discussion is getting us nowhere fast.

So what can be done? Well may I humbly suggest fidelity to the Constitution? If the federal government only performed the 18 tasks outlined in Article 1, Section 8, then we would not be in the mess we are in. Our monstrous tax code would not exist. Hundreds of federal departments, agencies, bureaus, or commissions would not exist. Social Security, Medicare, and Obamacare would not exist. Millions of regulations that only suffocate private enterprise would not exist. Hundreds of military bases across the world would not exist, and we would not waste blood and treasure on unnecessary wars that do not safeguard our liberties.

If government would only get out of the way, then of the US economy would again be the envy of the world. Prosperity and opportunity would abound. Individuals would be free to pursue life, liberty, and property. Free markets and free minds would flourish, and the result would be the greatest living standard for the greatest number of Americans far surpassing our wildest hopes and dreams.

Just a thought.