Q&A Friday #7: How Do We Get To A Balanced Budget?
Question: “Given that a Balanced Budget Amendment was #1 on your priority list for the Republican Congress’s domestic agenda, what programs you would support cutting in order to get the budget balanced? We are talking about $350-$400 Billion worth of cuts (and that # excludes off-budget spending for the War On Terror)to make this happen. There would have to be some significant programs go by the wayside.
Most Republicans I’ve asked can’t list enough programs to cover the difference without ending up sounding like Libertarians… just want to see if you can.” — President_Friedman
Answer: While of course there is an enormous number of things in the Federal Budget that needs to be cut, all you have to do to get to a balanced budget and to eventually wipe out the deficit — and even the debt — is control spending. Here are a few relevant budget numbers (although I wish I could have found them in constant dollars) that will help explain what I mean…
1972 — 200 billion Federal Revenues — 220 billion Expenditures
1976 — 309 billion Federal Revenues — 345 billion Expenditures
1980 — 521 billion Federal Revenues — 532 billion Expenditures
1984 — 674 billion Federal Revenues — 816 billion Expenditures
1988 — 867 billion Federal Revenues — 995 billion Expenditures
1992 — 1,127 billion Federal Revenues — 1,313 billion Expenditures
1996 — 1,415 billion Federal Revenues — 1,511 billion Expenditures
2000 — 1,823 billion Federal Revenues — 1,714 billion Expenditures
2003 — 1,789 billion Federal Revenues — 2,101 billion Expenditures
Take a look at those numbers and you’ll notice that Federal revenues aren’t constant; they’re always going up. Heck, even though we’ve had a war going on, a recession, and huge tax cut, revenues from 2000-2004 will show a gain by the time the final numbers for this year are in.
So why do we have a deficit? Because as we bring in more revenue, we keep spending at a faster rate.
Put another way, our country is like a 20 year old guy who’s making $16,500 a year and is completely broke. Then fast forward a couple of decades and that same guy is making $50,000 and he’s still broke. Well, how can that be? The amount of money he’s making has gone away! Yeah, but at 40 he’s driving a nicer car, making house payments instead of living in an apartment, watching a big screen TV instead of a 25 inch, and eating out every night instead of living off Ramen Noodles and 3 for a dollar pot pies. Just like our country, he spends every dime he gets his hands on and then some.
If we could ever put the brakes on — for say, a decade — and just increase spending at the rate of inflation, we could eliminate the deficit, pay down a significant chunk of the debt, and actually build up a slush fund that we could use in case of an emergency.
Theoretically, that’s very doable. Practically, it’s nearly impossible to pull off because of Congress’ nearly uncontrollable lust for spending our money. That’s why I support a line item veto, a Balanced Budget Amendment, and just about any other sort of measure that will help control spending. If we control spending, everything else will fall into place. If we don’t, we’re headed for a world of hurt one of these days…