Five Ways to Keep America From Turning Into Greece

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Five Ways to Keep America From Turning Into Greece

Written By : John Hawkins

“The trouble with socialism is that eventually you run out of other people’s money.” — Margaret Thatcher

Guess what, folks? “Eventually” is here for Greece and it may soon be for Ireland, Portugal, Spain, and Italy as well. So, when does “eventually” come for us? Last week, congressman Mike Pence told me that unless something changes, “eventually” may only be a decade away,

I don’t think there’s any question that unless we produce national leadership that is willing to confront our mounting fiscal crisis head-on, that America will be Greece within 10 to 15 years.

Does that sound like grim news? Well, it may be optimistic. Last week in a teleconference, Senator Tom Coburn told us he thinks it may only take four years for us to end up in the same situation as Greece.

If the United States can’t finance its debt, the government would be unable to pay its bills; we could see runaway inflation, a worldwide economic crisis, a new “Great Depression” — and unlike Greece, there is no nation or collection of nations big enough to bail us out.

Compounding the problem is the fact that while both political parties have helped get us into this situation, the Democratic Party is run by people every bit as blind to reality as the Greeks who are protesting attempts by their government to control spending. Their country is broke and living on the charity of other nations and their response is to throw Molotov cocktails and riot. Expect to see the same attitude from Nancy Pelosi, Barney Frank, Barack Obama, the SEIU, MoveOn, the Daily Kos, and the rest of the gang that’s driving this country’s future off a cliff right now.

Back in the real world, we need to start taking serious, painful, and potentially politically unpopular steps right now if we want to prevent an economic disaster that would make our economic woes today look like a vacation at the Grand Canyon. What do we need to do?

Freeze all discretionary spending indefinitely and then start paring it back: The first rule of holes is to stop digging. In our case, we need to simply freeze our discretionary spending for the foreseeable future. The baseline budget? It should be scrapped. Government salaries? They should be frozen until they reach a lower average wage than the private sector. Any government employees who don’t like that should take Chris Christie’s advice to a New Jersey teacher and quit if they don’t like the pay. There’s nothing more easily replaceable than a government worker. Any and all stimulus and TARP funds that haven’t been expended yet? They should never be spent. Spending on all departments, including education AND the military? Welcome to the North Pole, because it’s deep freeze time.

If the government wants to spend more in any one area, including extending unemployment benefits, they should actually have to take that money out of somewhere else in the budget. In other words, PAYGO should actually apply to new spending as opposed to being nothing more than political cover for politicians who want to pretend to care about the deficit. If we go even that far, it’ll quite naturally lead to something that’s often talked about, but seldom done: slashing fraud, waste, and non-functional programs out of the budget. Let’s kill Head Start. Let’s stop throwing away money on PBS, NPR, and the National Endowment for the Arts. Let’s stop forcing the Pentagon to spend $2.9 billion for aircraft engines it doesn’t want or need. There’s a lot to cut — so, let’s get started.

Reform Medicare and Social Security: Since about 2/3 of our budget is made up of “non-discretionary spending,” there simply is no way to get our spending under control without reducing costs in those areas. At a minimum, we obviously need to raise the eligibility age for both programs up to at least 70. That may seem like a big jump, but it’s worth noting that Greece just raised its retirement age 14 years from 53 to 67 — and it’s probably still not enough. Also regrettably, we probably need to raise the tax rate across the board for both programs. Given that both programs are in the red right now and are likely to only get deeper in the hole, we simply need to increase the amount of revenue being generated for both programs. Of course, we should also cut waste and fraud in both programs, move towards small investment accounts with Social Security money and Medicare vouchers that would allow recipients of the program to shop around and reduce costs. That being said, the problems besetting these programs are simply too big to fix by nibbling around the edges. One way or the other, we must make painful choices. Either we do it voluntarily or eventually, we’re going to run out of money to fund these programs and changes will then be forced upon us.

Finance a much higher percentage of the debt with long-term bonds: Given the increasing worldwide worries about the amount of debt the U.S. is running up and the problems Europe is having, we’re able to currently finance our debt at interest rates that are considerably lower than they will be in the coming years. Yet, we’re still financing a very large portion of our debt with short term Treasury securities sales. We desperately need to change over as much of our debt as possible to 10-year and 30-year Treasury securities. The downside is that we’ll have to pay out higher interest rates; so that will actually increase the deficit in the short term. However, by financing most of our debt over a much longer term, it will keep us from having to constantly turn over our short-term debt at what will likely turn out to be skyrocketing interest rates.

Repeal Obamacare: Oh, I know Barack Obama claims Obamacare will save us money — but if you believe that, you probably believe that Hillary Clinton actually came under sniper fire in Bosnia. Just since the bill has been passed the cost estimate has already climbed from 788 billion to over a trillion dollars and if Obamacare ever gets into the real world, as opposed to just being cost estimates done by an agency that admits it constantly underestimates the cost of entitlement programs, then the numbers are really going to explode.

Long story short, at the moment, we don’t even know how we’re going to pay for our Social Security and Medicare obligations. So, how in the world can we add another massive entitlement program? It’s sheer insanity, which is why Obamacare was, is, and remains so deservedly unpopular.

Grow the economy: We hear that the “rich don’t pay their fair share.” But how can that be when 47% of Americans don’t pay any income tax at all? You hear a lot of talk about Washington “creating jobs” and “improving the economy,” but the only way they can actually do that is by getting out of the private sector’s way instead of demonizing it.

Here’s the reality: to get out from under all the debt our politicians have run up, we desperately need to grow our economy. We need to give corporations and the rich an incentive to do business here. As John McCain noted during the campaign, we have the 2nd highest corporate tax rate in the world. We need to cut it. We also need to get rid of the capital gains tax and move towards a flat tax, fair tax, or national sales tax – any of which would likely lead to massive economic growth. Granted, that won’t be popular with the people who care more about taking revenge on the wealthy for being successful than growing the economy, but coincidentally, those seem to be the same people who’ll happily spend this country into oblivion if we let them.

Robert Arvanitis

Your advice is spot-on.

Once problem is how that NJ teacher will mis-interpret what Governor Christie meant by “stop teaching.”

He meant get a real job. But she heard “keep getting paid only now do absolutely nothing.”

The bureaucracy will react just like that, so we'll have to get rid of them all.
http://profiles.yahoo.com/u/ELCWV5ANDUEJ5D5PB35FL2LZ6Y Bildo

I would change one thing in your analysis, and add a 6th item.

Instead of freezing government pay, I would roll it back, just like is done in the private sector when companies get in trouble. There should be a 15% across the board pay cut for all government employees and judges, a 25% pay cut for Congress and the President. The Congressional pension plan should be abolished, and made retroactive so that the former Congressmen who helped to get us in this mess aren't rewarded for their irresponsibility.

The second would be economic reforms to allow US companies to be more competitive in the world market. Lowering the corporate income tax will help a lot of things, but it's not the reason we are losing manufacturing so quickly.

Germany is the second largest exporter in the world, yet they have a mature economy, and a highly paid workforce. What they don't have is tort law that punishes companies for simply existing. Tort lawyers should become an endangered species.

Unions should be subject to anti-trust law. That would solve that problem without doing anything else.

These reforms would allow the US to retake its rightful place as the world's leading manufacturer, and would go a long way towards being able to repay the debt without bankrupting the country.
King Homer

Oh man! You ought to bite your tongue! Why shouldn't the Pentagon NOT be forced to buy aircraft engines they don't need for 2.9 Billion?

General Electric builds a LOT of aircraft engines plus they are deeply mired in everything GREEN! The government can't cut off their gravy train because Ogabe DaDa, the magic Marxist mulatto would lose his propaganda arm (NBC and affiliates, or associates as he likes to call them now days).

The current regime knows it shouldn't bite the hand that feeds them all the campaign money.
Power_System_Oper

Fire all of the supervisory white collar career bureaucrats at both the federal and state levels They are bunch of drones who only add negative value. All they do is hinder the productivity of the career civil service worker bees. Yes, fire all of the white collar supervisory career bureaucratic drones in order order to save immediate tax payer dollars which fund their bloated salaries, save future tax payer dollars that would be doled out in generous pensions for those drones, and witness an immediate huge gain in productivity by the career civil service worker bees.
Power_System_Oper

Legalize drugs and witness a significant reduction in taxpayer dollars which fund the huge prison-industrial complex. Also watch all of the havoc caused by the Mexican Drug Cartels and local drug gangs evaporate. We should have learned those lessons a long time ago after our experiment with alcohol Prohibition
Power_System_Oper

Actually King Homer, Obamamaster wants the money for the aircragft engines deleted from the federal budget. It is Congress (both DEMS and GOP) which is pushing for tax payer dollars to be spent on the engines.
Cliff Hanger

John, this is the most foolhardy article you have ever posted here, Mr. Professional blogger. Why does your party punish the poor and fellate the rich? You, sir, are a moron.

This is exactly why your party is going into the dustbin of history.
TheDickNixon

flagged for stereotyping, lying, and personal attack.
TheDickNixon

flagged for stale, tired, old cliches
baoxian

Now would be a great time to push for major reform of the tax code and Federal business regulations. Obama's “new normal” of 17% unemployment and skyrocketing taxes isn't acceptable, and conservatives need to call him on it.

This country needs to create jobs, and that happens when people can start new businesses and conduct business without the government crushing everything they try to do with mandates and taxes.

This is also an ideal time to shift away from our current income tax system to the Fair Tax, Flat Tax, or a national sales tax. The tax code is arcane, obsolete, and a huge drag on business. Even if the overall tax burden remains the same, simplifying the code and processes would be a huge boost for the economy.

Hopefully the GOP will put together an agenda addressing these items, since the current government is utterly incapable of even beginning to address the problems this country faces.
Mr. EMT

Until the current regime is voted out…
ICEBERG DEAD AHEAD!

Obamao is not interested in doing anything other than destroying America.
Mr. EMT

Exactly what has “john's party” done that can be considered punishment to the poor, jackass?
I will and have criticized John for a number of things, but we both share in the belief that the poor need to be able to work themselves into prosperity, something YOUR party absolutely does not believe in. Policies supported by both sides support the facts in what I just stated.
All you have is empty minded rhetoric.
Mr. EMT

Watch the ER's at hospitals flood with Od's and other drug complicated emergencies. Watch STD's skyrocket due to shared needles with druggies who are too stoned/high to care if they are giving each other “a gift that keeps giving”
Watch crime rate go up in neighborhoods where drug use is prevalent from people who will rob their mother blind for drug money.
Watch breaking and entering, mugging, either crimes related to drug use sky rocket.
Watch kids get curious since its legal to do drugs, who cares about experimenting with cigarettes and alcohol when you can go straight to the hard stuff?

Drug legalization is the most toxic and destructive weapons the left has tried to push for.
The fact that libertarians support it is what makes me not a libertarian.
RBC47

Like most angry ideologues, Mr Hawkins proposes something Congress will never enact. It does not matter whether the majority in either or both houses of Congress is Democrat or Republican or whatever, it won't happen. And shouldn't happen.

For every difficult problem, there is an answer: it is easy, it is simple and it is wrong.

Looks like figuring out something that is feasible and might actually do some good is just too hard for Mr Hawkins.
mightysamurai

Stop spamming the thread, jackass.
mightysamurai

It's been my experience that when someone campaigns for a “feasible” solution what they really mean is “a solution that doesn't offend my personal ideology”.
Real Politik

This is an excellent idea. It will cut crime in the USA by a third. It will eviscerate the Mexican drug cartels, help stabilize Mexico, and reduce those attempting to cross the border. It will (if the draconian drug laws are removed, and sentences under those laws are commuted) save billions in incarceration expenses.
UFKA_Smithwick

2 ways to prevent it; 1) kick out all fiscally irresponsible democrats and turncoat republicans to be replaced by competent leaders. 2) hold those new leaders accountable and repeat step 1 when necessary.
Christopher_Taylor

Even if it were a good idea to legalize drugs, we cannot tax our way out of the situation we're in, no matter what you put on the market.
Christopher_Taylor

Put aside the book of cliche's a while and think for once eh?
Christopher_Taylor

This is exactly why your party is going into the dustbin of history.

Let me guess you bought into the whole idiotic “America is now socialist and completely rejected conservatism” lie in 2008, didn't you? I guess this November is going to be a bit of a nasty surprise isn't it?

Until you start rationalizing and decide Diebold stole it all.
frankania

everything you stated is nonsense. There are no cigarette cartels, no liquor cartels. Why? Because those are LEGAL drugs. There is no reason to commit crimes. Because of competitive capitalism, they will be cheap, and controlled (like liquor and cigarettes) so our youth will be less inclined to get hold of them.

And if you don't want drugs, DON'T BUY THEM.
King Homer

Well, ACTUALLTY, it's Sec Defense Gates that doesn't want it according to
the WaPo link. He's the one threatening to push for/advise a presidential
veto. If you have a link for your assertion, I'd be more than happy to look
at it and withdraw my statement.

Wa Po article:: Gates has repeatedly threatened to advise President Obama to
veto the entire defense bill if Congress pursues the second engine. The
House approved the project anyway, overcoming an attempt by opponents to
strip it from the bill. That attempt failed by a vote of 231 to 193, with
both parties divided on the issue.

I'm not sure how many of the 231 votes were Repubs but the majority HAD to
be dems. If you have a vote count, I'd be interested to see how many Repubs
actually DID vote for it. Then your assumption of “both Dems and GOP would
be correct” until I see that, sign me skeptical, I'm not sure what the
majority spread is and at this particular moment I could really give a rat's
ass to find out.

If you make a point, a link to evidence to back up an assertion would
enhance your credibility and some here might marvel at your adeptness at
intelligent correspondence. Who knows? Your standing in this community
would be enhanced astronomically. Thanks for listening.

MSNBC News Flash: Arizona Law 'Makes it a Crime to be Illegal Immigrant'
(Doh!)