www.Waltonsun.com
It took a ?Kenyan-born, Karl Marx-loving, Allah-worshipper? in the White House for some Americans to wake up and realize our serious financial dilemma. Never mind that the previous occupant treated us to an all gain, no pain diet with tax cuts and a war of choice sandwiched between a huge entitlement increase, aka Medicare Part D.
Coupled with the spending to stimulate our moribund economy, ?Danger, Will Robinson, danger.?
There are 10 ways for a base runner to score from third (count ?em); likewise there are multiple means to fiscal sustainability. One path touted is by shrinking government spending, and the Walton County Tea Party Patriots are right: We could solve our fiscal dilemma by reducing expenditures. The National Research Council and the National Academy of Public Administration published a bipartisan analysis projecting that chopping spending by 20 percent over the next decade would be sufficient. (See ?Choosing the Nation?s Fiscal Future? at www.nap.edu? .)
Our local Tea Party is ignoring the harsh reality of how deep and brutal a 20-percent reduction in government spending will impact society. Instead, on their website, we see gimmicks like ?You Cut,? where online participants vote on specific spending cuts. The total amount equals .017 percent, according to the conservative Cato Institute. Multiply this by a thousand, and you are still shy of 20 percent. You Cut is a sham. It is like an alcoholic shunning AA, opting for light beer instead of vodka.
The necessary cuts would ?impose substantial pain on virtually all defense and other domestic programs,? according to the report. Many domestic programs would be eliminated or reduced, and we would have to redefine defense priorities.
Facing the ax would be Department of Education programs that provide money to school districts affected by land exempt from property taxes because of military bases like Eglin. School improvement programs, education for the disadvantaged, programs that improve teacher quality and charter school grants would also be on the chopping block. Programs that promote safe schools, abstinence education, Head Start, child welfare, Job Corps, special education and career, technical and adult education will face reductions. Local or state funds would be required for these programs to continue through higher local taxes.
Facing complete elimination are commercial subsidies and ?low-value? activities including but not limited to National Science Foundation education programs, applied research for fossil fuels, research on fuel-cell technology, research on energy efficiency and the Energy Star program.
Department of Agriculture conservation programs must be reduced along with agricultural crop subsidies. You can kiss four lanes of U.S. 331 goodbye because highway trust fund grants would be scaled back. Note to Dawn Moliterno: Federal funds for beach nourishment would be cut, too. :idontno:
These are only the tip of the iceberg; there are dozens of other programs facing reduction or elimination. Worthless programs, some will say. But the next two areas are essential for this plan to work.
Redefining defense via a 20-percent drawdown means the military will have a lower percentage of GDP since before World War II. Employment at Eglin, Tyndall and the Navy school would be sliced. The study cites that ?the capacity to modernize or replace weapons systems will be virtually eliminated.? Our Armed Forces would be limited to small, shortterm deployments and could not face multiple engagements.
Probably a big deal in these parts, inflation adjustments for federal civil service, military retirement, veterans? disability benefits, railroad retirement and Social Security would be less generous. :(
These spending cuts are not a la carte. Either you accept the whole enchilada, or someone pays higher taxes ? unless there is a tooth fairy.
Buz Livingston is a certified financial planner. He operates Livingston Financial Planning Inc. focusing on hourly financial planning and investment management. Contact him directly at 850-267-1068 or at buz@LivingstonFinancial.net? .
BUZ LIVINGSTON
Just Plain Talk