Conserving Our Money

Recently, I was asked how I would solve the financial crisis or what the Conservative position on fiscal responsibility is.  I will lay out my views here.

To begin, it is important to note there are several layers to Conservatism, just like there is to Liberalism.  You have fiscal Conservatives, social Conservatives, constitutional Conservatives, and others.  Today we will focus on fiscal Conservatism since this post is regarding money and spending.

Our Federal Government is too big.  Many people view the Federal government and accept it for the size and scope of its responsibilities.  They accept the notion that all the departments, agencies, and officials that run them are a necessary part of governance and although this may be partly true, it is only true at the state level.  

There are over one hundred different departments and agencies that should be cut immediately from the federal budget.  The Department of Education and the Environmental Protection Agency are two of many that should be abolished.  Although they may have been implemented with the best of intentions, collectively they have done sever damage to the health and well-being of our economy.  We simply cannot afford them.

"But what about the kids?  We can't get rid of the Department of Education.  How would they get educated? What about global warming and green houses gasses?  What about clean air and clean water" are some common responses to the idea of cutting these departments.

For this discussion, we will tackle education.  

Children would continue to get educated without A federally managed system.  In fact, it is highly likely they would receive a better education if education were managed at the local level. 
Here's why.  
Since 2000, education spending as soared 155% in this country.  You will be hard pressed to find anyone that would state our education system has improved at all in the past decade...has improved at all in our lifetimes for that matter.  The test scores certainly do not indicate an upward trend.  According to a USA article, America ranks 14th, 17th, and 25th for reading, science and math respectively.  The United States was 4th in the world in total dollars spent per child and yet we rank pitifully low in test scores.  The Staggering number of dollars being spent is obviously not the solution to improving education.

Returning the cost of education to the states should happen immediately.  School choice, charter and private schools would ensure the best schools stay in business, teachers would be paid according to their merits and not according to Union policy, and control of education would be brought back to the community where it can be better tailored to the needs of the students that attend it.

Conservatives are NOT proponents for the elimination of government in total.  Yet, we want government returned to the lowest level, to the governors, mayors, and city and state legislatures.  Federal oversight has done absolutely nothing to improve the education of our children and there is no possibility improvement in the future.

The case could be made for dozens of other departments and agencies.  Returning this power and responsibility to the states gives government back to the constituency and enforces the 10th Amendment of the Constitution.  Cutting the Department of Education alone would nearly balance the budget in 10 years.

The next thing that must happen is base line budgeting has to stop.  Base line budgeting assumes the amount spent last year on the budget is the new base line for future spending. 
This happens every year. 
The TARP and stimulus bills that were passed as "one time" efforts to prop up the economy have become part of the base line.  So every year since they have been passed has been like adding another TARP and stimulus bill.  This is a major cause of the $1.4 trillion annual deficits we have been running the past 4 years and the reason we can expect another $4 trillion to be added to the debt in the next decade.

The Senate must pass a budget.  It is their constitutional duty to pass a budget.  The last budget they passed was back in April 2009.  Each year since then we have operated under a "Continuing Resolution" which basically means we continue to operate as if the Senate actually DID pass a budget.  This is terribly irresponsible and demonstrates total incompetence.  These actions are being taken by people we have chosen to run our government.  

We may need to reconsider our choices.

For those departments remaining that have been deemed absolutely essential such as Defense, Transportation, and the Treasury, cut 1 penny from every dollar left in the budget.  1%.  Senator Connie Mach introduced the Penny Plan that would take one cent from every dollar in the budget, across every department.  Assuming we keep every department we currently have and capped spending at 18% of GDP, this action would balance the budget in seven years.  This is a very reasonable approach to a completely unreasonable problem and amazingly has gotten little to no support from democrats.

Abolish capital gains, inheritance, and death taxes.  Taxing inheritance is akin to theft.  Americans who work their whole lives to leave their children an estate should not be punished for responsible with their money.  The amount of revenues that would be generated simply by cutting the capital gains tax would create hundreds of thousands of new jobs, further increasing the tax base and increasing revenues. 

Lower the Corporate tax rate.  America has a corporate tax rate of nearly 40%!!  We have the highest corporate tax rate in the world and have done little to attract foreign companies to set up shop in our country and hire Americans.  Many American companies have begun shipping production efforts out of America because the cost of doing business here has become punitive.  The world wide average corporate tax rate is 25%.  We can certainly do as well here in the Land of Opportunity.

Lift the ban on new off-shore drilling permits.  Oil and natural gas are the lifeblood of the world's economy and America has enough natural resources to power its cities, factories, homes and cars for at least the next 100 years.  Allowing new permits would instantly trigger a hiring spree, sparking new investment, increasing the tax base, reducing unemployment, and increasing revenues.  The argument that drilling is unsafe is ridiculous.  Accidents happen and there is no such thing as a 100% guarantee on anything.   There is only responsible operational risk management.

Continue exploring renewable energy resources like wind, solar and nuclear, but let it happen at a rate determined by the private sector. 

Finally, The Flat Tax.  The current tax system is entirely to complicated, convoluted and confusing.  True fairness is realized when everyone pays the same amount regardless of their income.  Set the rate at some number, say 28%, limit the number of deductions to education costs, charitable donations, and mortgage interest, and provide tax credits to those in the lower income levels.

It is an indisputable fact that reducing taxes increases revenues.  It has been proven multiple times in the past.  Any comments to the contrary are lies. 

It is the responsibility of our government, as it is with all of us individually, to live within a budget.  It is immoral for a government to spend more than it takes in and then demand more money to meet its spending.  Another hard, cold fact is that even if the government took every penny earned by the wealthiest Americans making more than $250,000 a year, we would still be running an annual deficit of approximately $200 billion.  

We cannot tax our way out of our fiscal woes.  

Conservatives don't want to see the impoverished suffer more than they already are.  We don't want to take away social security or medicare or medicade.  We simply want fiscal sanity and responsibility,  We want to take care of the mess we have today so as to ensure our children do not start their lives off with massive debt  which is now over $60,000 for every man woman and child.

We must stop the spending TODAY.  We cannot continue to operate as irresponsibly as we've done over the past 2 decades.  The time has come for us to roll up our sleeves and actually entertain out-of-the-box thinking in order to get our financial house back in order.  There are several paths listed in this article but this is certainly not all-encompassing.  There are many plans that have been presented by various individuals, good American legislators who see a problem and are offering possible solutions.  We need to rally behind them to offer them support.  Contact your representative today and tell them not to bargain with your children's future.  Remind them that it's OUR money and our livelihood that is being snuffed out.