Wednesday, April 20, 2011

National Budget

I doubt if many will argue that the only way to handle the excessive spending and massive debt facing the U. S. is to establish a finite budget that is stringent enough to achieve the goal. Now, if this is done the next task is to decide how the finite "pie" is to be divided. How much will we spend on defense, public welfare, education infrastructure, environmental pursuits, developing alternative energy etc.

Each time there are demands by those seeking to either maintain or increase their allotment, they must also advocate which other segment of the pie should be reduced in order to accommodate their demands. So when teachers, for example, bemoan the slashing of education funds, they should then advocate the reduction of, say, environmental protection, military spending, endowment of the arts or some other piece of the pie. Likewise, for those who are adamantly opposed to funding the growing piece of the pie, e.g., Medicad, must be willing to take cuts in other areas.

The other alternative to robbing Peter to pay Paul is, of course, to raise taxes to produce more revenue or make the pie larger. But I think all will agree that this approach has serious limitations. Taxing the rich at a much greater rate than the middle and lower income people is not a viable alternative. There are simply not enough rich people to offset the exponentially increasing spending. And since almost one half of our citizens in the lower tax brackets pay no taxes, those in the middle income bracket will necessarily be taxed at a greater rate. Bear in mind, that the top two percent of the rich already generate 75 - 80 percent of tax revenue; there is a limit to the positive effect to the reduction of the debt. Remember, the basic premise of socialism/communism is to take from the rich and spread the wealth among all the people. (Including the 47% of the population that pay no taxes now?)

Therefore, it seems clear to me that the only real way of attacking the problem of ever escalating national debt is through establishing finite limits to the size of the pie. Now go back to the first paragraph.