Monday, August 8, 2011


Well, there it is. The most powerful and richest country in the history of the world has just been told it lacks the means to pay for its bloated largesse, and for the first time in 70 years, has had its credit rating downgraded. The United States is now on par with first-world, but struggling, European nations who've also pushed their economies into record levels of debt and penury. Turns out you can have your cake and eat it too, but only up to a point, and this, I'm afraid, is that point.

How we got here is a tale much-told, but one told in many different ways. I'm always amused by those whose narrative sticks to Wall Street fat cats, George W. Bush or the US military. If only. History will deservedly know of this moment in time as "The Obama Downgrade", as this president has done everything possible to plug his ears to the reckoning he, and our country, are about to pay for his and our profligate ways. His solution has been to open the wound even wider, in the vain hope that his spending billions on innumerable items might beget him a permanent majority with which to ram through even more. It's not like many of us haven't been saying - pleading - "we are out of money" for years. Even me, amateur beer and music blogger, has been saying so - here and here and elsewhere besides.

The Obama spending blowout of his first two years has brought spending as a share of GDP - already way too high - to higher than any time since 1946. In 1965, as Lyndon Johnson was embarking on his "Great Society" programs, we were spending 17% gross domestic product on entitlements, the military and everything else - this during the Cold War, no less. After years of unchecked government growth, Reagan, Bush & Clinton actually had it knocked down to 18% in 2000. Then came the Bush years - and worse - the Obama years (Obamacare, three wars, Dodd-Frank, a useless and wholly ineffective "stimulus", cash for clunkers, expansion of Medicare and so much more). We're now at nearly 26%, and the world of money - the people who lend it to us and who rate our ability to pay it back - are calling it unsustainable. Imagine, being lectured by Communist China on our overspending. Embarrassing.

What we've gotten for all of that spending is highly dubious. I'm of the opinion that the federal government should be cut to the level necessary to ensure that the most vulnerable in our country have food, shelter and health care. Add in defense of our borders and a small handful of regulatory tasks arguably best suited for a central authority, and everything else is up for grabs. Does that make me a Tea Partier? Well - I'm not. Just an unaffiliated semi-libertarian who even votes for Democrats sometimes. Yet imagine how much worse this would be without those fire-and-brimstone economic banshees on the right, no matter how ridiculous some of them are. They've correctly campaigned on this issue front and center for two years now, and without them, you know your taxes would be heading upward to pay for the unsustainable status quo, rather than having a super-flawed, kick-the-can-down-the-road but nonetheless real debt deal than still didn't keep the S&P downgrade hounds at bay. I can assure you that any economic recovery would be dead in its crib, more dead than it even is right now, had Obama and his Democratic and squishy Republican comrades had their much-relished opportunity to raise taxes on American business and "the rich" to kick the can down the road a little farther.

So enough of my jawin'. Here's what we do now:

1. Means-test social security, starting right now. Anyone who doesn't need it, doesn't get it. Set the expectation that going forward and with the newest people entering the workforce, this is a "safety net" program only - as it was intended.

2. Cut the corporate tax rate dramatically. If we could do just one thing to provide a “stimulus” that would not only save thousands upon thousands of jobs, but also send the stock market soaring (which would, of course, put real money back in the pockets of millions of Americans), it would be this. Companies who once were earmarking dollars for Washington DC can now decide to retain current employees, or hire new ones to remain competitive – or instead spend the savings on new initiatives that will keep current employees engaged and future-focused. This applies to corporations, small companies, and mom-n-pop businesses – give them some of their hard-earned money back so they can use it productively.

3. Come home from Libya, Afghanistan and Iraq. Everyone feels the pain - even the military. I might prefer up to do this in a more considered manner, but we're out of money and even the generals and the contractors need to pitch in right now.

4. Raise the retirement age, right now. Show the world that we mean business and that we understand that life expectancy is going up by making eligibility for the government teat something you get in old age and not a moment before.

5. Kill at least 4 government cabinet agencies: education, labor, agriculture and homeland security. Watch as the world as we know it remains pretty much the same as it always has – albeit with less regulation, hassles and needless expense.

6. Cancel Obamacare, high speed rail, "green jobs" initiatives and government-funded mortgage modifcation programs. Sorry Mr. Obama, you have to feel the pain as well - we can't afford any more boondoggles of dubious or negligible value.

7. Take away my mortgage interest deduction in exchange for a 3-5% cut in personal tax rates. That's right - I think most homeowners, to say nothing of the markets and non-homeowners besides, would be overjoyed to trade this so-called sacred cow that comes from owning a home for more predictability in taxation. They may even out at the end of the day, with a net bonus of taking the government out of homeownership schemes forever.

Do all these things, and truly reform our entitlements and how we fund and approach the US military, and this will all be a bad dream. I'm all in on the Hedonist Jive plan to "fight the power". You?