Tuesday, October 12, 2010

Pathway to recovery

The following is a personal perspective paper of The Jacksonian Party.

What follows are my current set of thoughts on the general state of the federal budget.  Do note that these have changed from my earliest articles and now represent a better understanding of the impacts of federal spending and attempting to cover certain areas.

Getting the federal deficit and debt under control requires that the size, scope and cost of government be addressed so as to remove those portions that are costly, too large or not Constitutionally mandated.  In rough times Americans understand the need for austerity and our government should be a reflection of the people and do the same so as to get its fiscal house in order.  This will mean changing how we view the form, fit and function of government at all levels from the local to the National, and none can be spared.  The best place would be to start with the local, but that is something that must be done locally, and even within the States it is the fiscal position of each State that is different that will require different remedies, so cannot be addressed in an overall fashion.  Only at the National level can the federal government be addressed for all people, because it represents We The People.

Any austerity program at the federal level must include the following:

ENTITLEMENTS

These are the goodies that government promises to sectors of the populace by taking money from the productive sectors of the economy, which includes working individuals.  Government bureaucracy has proven startlingly ineffective, inefficient and incapable of actually keeping money in a 'trust fund' and has had that concept made obsolete by laws passed under the Johnson Administration.  The there is no 'trust fund' and no place where money placed in it is 'held' for you.  The 'trust fund' is IOUs from the Treasury with a promise to pay them back when needed.  Whenever current receipts cannot meet outgo, those funds are called upon from the Treasury.  Social Security went into the 'red' this year, which means it ran out of current receipts and now was getting money by cashing in the IOUs.

It should be noted that this increases the deficit by removing available funds from the rest of government, and goes directly into the debt.

Medicare and Medicaid are both medical systems made to help the poor and elderly that are also famous for having a poor bureaucracy, bad finances, a history of negligence and a basic inflator that keeps moving the cost of treatment up over time while never covering the full cost of treatment or medications.  These programs are pure outgo: they take from the general funds and are always in red ink due to skyrocketing costs of providing funds via this system.

Together these three entitlements account for all the income taken in by the federal government.

All else, including interest on the debt, is paid for by deficit spending that increases the debt.

This system is terminally broken and will break the Nation if it is not shed from the National level.

For SSA any attempts to change the 'retirement age' or index pay outs or any other side-issue is an attempt to foist this disaster on our children so that they get stuck with a massive bill and a country that can't pay it back.  That is immoral, unethical and sounds something very like indentured servitude, which is outlawed.

Thus these must end at the federal level.

For those receiving current payouts on their 'account' from SSA, they should continue to get their payouts as it is what they expect.  All others should receive their money back.  While I would prefer a one-time, lump sum payment, that is probably unworkable.  Thus allowing individuals to use the credit in their 'account' against taxes owed would allow for the repayment of funds via people keeping their money so they can invest it on their own.

With this should come the end of the FICA tax, so that SSA draws only from the general account.

Together these two create the largest tax decrease that the American people will ever see, and would allow many lower income families to write-off their taxes for some years before their SSA account drops to zero.

For Medicare and Medicaid these two programs should be combined, divided in half, fiscally, and handed out as simple medical aid block grants to the States apportioned by population, and decreased annually so that after 5 years it is phased out.  This gives the States time to figure out if they even want to run such a program and how to do so on the State level.  Note that this will bolster the Medicaid-type system, remove Medicare completely, and put funds into the hands of State legislatures to cushion the change over of a federally backed system to a State backed one.

At current demographics SSA will take 20 years or so to disappear completely, and the tax write-offs will have ended in 5-10 years.  During this time the entire program runs in the red, as does the much lower medical block grant system.  When the last payee drains their account, SSA will be over.

No one currently getting a benefit is dropped.

The 'retirement age' is abolished.

Those now working get to keep more of their pay than has been seen in eight decades.

 

DEPARTMENT ABOLITION

Parts of this section are based on ideas from Adakin Valorem at PJM.

There are a number of government agencies and functions at the federal level that just do not work and are not given to the federal government as a responsibility.  The agencies, bureaus and such include:  Education, Energy, Agriculture, EPA, FDA, Labor, NASA, OSHA.  It is not an exhaustive list and needs to be generously expanded. For these organizations a simple stoppage of payment to them by not passing spending legislation for them is enough to end them.

Government organizations that run under federal imprimatur that also must go: Federal Reserve, Fannie Mae, Freddie Mac, Sallie Mae, Ginnie Mae, the bailed out auto companies, the bailed out banks, indeed anyone gotten 'bailed out' by the federal government as it shouldn't be bailing out anyone, ever.

Direction should be given to the GAO to seize the assets of all of these organizations that were not once private and to sell them off, which includes all the buildings, land, merchandise, equipment and all other things of real value held via these organizations for the federal government. 

Those organizations that were once private or are a form of 'corporation' are to have stock issued for the amount held by the government and one share issued to every tax paying citizen of the United States.  Similarly the debt held by each is to be issued in bonds, one per every tax paying citizen of the United States.  When the government fails, it is the people who are left holding the bag, thus the people are seen as the cure to solving what happens with government corporations or bailed out companies that it is not allowed to run.

At this point much of the red ink for the remains of SSA and the medical block grant system will be paid for by redirecting funds from these closed down functions to the legacy entitlement functions.

Further there will be cash generated by the sale of land, buildings and equipment from government hands, which can help to off-set the massive tax breaks given to the American people so that government does not go too far into the red ink.  This is not a minor point, and selling assets off during an economic downturn puts value back into the economy by encouraging economic activity.

Note that HHS and SSA will also fall into this area as they no longer serve any purpose as those drawing money from SSA accounts will get it directly from the Treasury Department, and the move to block grants removes the need for HHS.  Once any individual has gotten their account to zero, they can destroy their Social Security card: that system is phased out over time.

The laws that enabled these organizations can be removed via a general 'sunset' law or per organization.

 

RIGHTSIZING

The DoD has many functions, bases and responsibilities that need to be reduced.  Overseas bases, while nice to have, are a drag when not in wartime use.  As was done for US bases, so should our overseas bases be cut drastically, particularly to any foreign Nation that has their own resources and ties to the US.  Any bases not critical to logistics for current warfighting must go, and even those that are necessary should be examined for scope of size and activity.

The modern Aircraft Carrier Battle Group is an awesome wonder, to keep acres of US territory afloat in so many places, and is horrifically oversized for the needs that are being met by UAVs and UCAVs.  There will always be a need for some human manned aircraft, to be sure, but these needs must be sized to an expected threat envelope against Nation States.  As surveillance and ability to go after individuals has become a highlight of UAV/UCAV platforms, these can be increased while the active manned fighter/fighter-bomber capacity decreased.  What is needed is the ability to intercede in hostile airspace, remove threats to it and then allow the smaller, lighter, cheaper and more efficient unmanned platforms take over on the lower end threats.  Similarly, once airspace domination is gained there is little need for 'stealth' bombers and something very like a 'bomb delivery platform' based on modern commercial jetliners should be examined as a possible replacement for the venerable B-52 which has had its lifespan extended to 2030-2050.

Active ground forces that no longer need to be at overseas bases then demonstrate that these positions can be downsized out of the system and put into a reserve based system.  As ground forces need mobility the current Stryker/Bradley/Abrams platforms work very well and replacements for any should be examined with an eye to keep speed and accuracy up to the needs of the modern battlefield.

The Key West agreement for division of aircraft missions is one that needs to be re-examined in the age of strategic oversight from space based platforms.  The USAF should cede the tactical ground to the ground forces, including the UAV/UCAV platforms not designed specifically for strategic overwatch.  All close combat and tactical air combat, beyond clearing out airspace for strategic overwatch, needs to devolve down to the ground and naval forces.  With that said a push to strategic recon, bombing and overwatch requires some new platforms for quick deployment of satellites for navigation, safety and comms.  These need not be ground to orbit platforms and can just as suitably be delivered from air breathing platforms.

 

The State Dept. has a problem in being unable to coordinate efforts with DoD in active war zones or against asymmetrical threats.  This needs to be addressed, perhaps by going back to the early tradition of placing the State Dept. under the military so as to ensure continuity of training for security personnel and that the overseas needs of Embassies do not need to go through multiple systems of bureaucracies to get their needs addressed.

Foreign aid should be cut, save for those items of encouraging purchase of US goods by overseas individuals or governments.

The UN should have its donation cut, completely, as the number of programs and spotlight given to those that do not support human liberty and freedom makes it a system contrary to the ideals of the United States.

 

The Dept. of Homeland Security needs to be broken up into its constituent parts, with the Coast Guard returning to direct control of the Navy.

Agencies dealing with our nation's physical security, particularly the breaching of borders by individuals and groups, need to recognize this is a military threat to the United States and is to be addressed as such.  The use of UAVs with rapid deployment ICE forces, backed by military units trained for civilian encounters (much as was done in Iraq and Afghanistan) needs to be stood up as part of the Reserve responsibilities so that all State military Reserves take part in enforcing our common borders.

 

The Dept. of the Interior needs some paring back to essential functions on the mapping and charting areas, particularly for natural resources including fish and wildlife.  Areas held by the Bureau of Land Management can be sold off to the States as the legacy of the US government grabbing large portions of land is one that was done before the States were fully settled.  Now that they are settled, the land needs to revert back to the States.  A distinction between National Parks and National Landmarks needs to be abolished, and States need to be asked if they can better run these facilities than the federal government can, while keeping their current protected status.  Multi-State parks and landmarks can be administered by multi-State organizations if the States wish to do so.

 

The Treasury and Commerce Departments will see many of their organizations and affiliations slashed by removal of Departments and Agencies.  Such things as the FDIC can be better run by private insurance firms and should be either sold off as an insurance company or legislation passed to allow private concerns to offer this protection so as to remove the federal part of it.  With Fannie, Freddie, Sallie, Ginnie along with other quasi-governmental organizations put out either as public stock organizations or sold off, there is no need to have them backed by the Treasury Department.  Similarly the Federal Reserve has put too much power into the hands of too few individuals who are not accountable to the public, and it needs to be removed: the US did without it between 1831 and 1913 and can do without it again.  There is a statistical need to track the economy for the government to understand the impact of its legislation and regulations, but this is a minimal requirement and can be met by standard private accounting firms.

 

INTERIM GOALS

No Congress can tell another Congress what to do.  Congress can pick up responsibilities left to it by a previous Congress, but this is voluntary: there is no way to make law compelling a following Congress to do anything.

That goes for taxation, spending and all the functions of government that source from the Legislative Branch.

Congress has obligations to fund the other Branches of government, but that need not be to entirety of all Departments, Agencies and organizations.  The Supreme Court must be funded as must the President and Ambassadors.  Military expenditures come up every 2 years for review.  All else is optional.

The amount of dislocation and change that the Nation can take is up to Congress, and if the goal of the Progressive Left has been to expand government so as to put us all in debt, the goal of a fiscally conservative Congress must be to remove excess parts of government, cut spending and devolve programs out of the federal purview.  This can be done by handing them to the States, the people or just liquidating them. 

There is no obligation to keep, say, the Dept. of Agriculture going.  Or Education.  Or Energy.  They can go as easily as not funding them and letting the GAO sell off their assets and pay out the severance benefits to employees.  It is just that simple - as a sovereign part of the Nation, the Congress can just not fund things.  That is its most powerful tool when downsizing, and it is legitimate and a necessary tool to get rid of costs that the Nation cannot sustain.  That is their responsibility, too, which is why we grant them that power.

2 comments:

Darrell said...

I just found this blog. Are you serious? Andrew Jackson destroyed the 2nd Bank of the U.S. (2d BUS) when he removed U.S. treasury deposits from the BUS. AJ claimed that he hated ALL banks, but when the BUS came to an end, state chartered banks mushroomed, both in number but also in the credit they extended. In short, AJ's policy led to an inflationary spiral and the depression of 1837. You hold this president up as a model for 21st century America? Far worse than his foolish economic policies, Jackson held a rigid and thoroughly demogogic view of American democracy. In apparent complete ignorance of the founders, AJ saw the American form of government not as the republic the founders had envisioned, but as a proto-fascist, mob-rule in which General Jackson would serve as Caesar. My God, man, are you insane?

A Jacksonian said...

Darrell - It is as you say, and yet the Federal Reserve has taken the exact wrong policies leading up to the Crash of 1929 and leading up to the current economic recession heading into depression. This insitution has also devalued the currency by 95% since it was created, so the question is: what good is it?

It is a strange thing to say that removing power from the federal government is creating a 'proto-fascist, mob-rule' State. Fascism seeks to centralize financial and industrial power to the government so that it will follow government edicts - yet disbanding the very institution that would do this is contrary to that concept. Are we really better off, now, with a Federal Reserve now being handed powers without any accountability to them to 'oversee' consumer credit? Is that not, in itself, a fascistic power to have the State oversee you?

While the civil service system was corrupt under the Jackson regime, that speaks to needing less government, not more of it.

Finally if you wish to learn to distinguish between Jackson and Jacksonians, and where that fits in American culture you can check out an article by Walter Russell Mead.

You can read Jackson's Bank Veto Message at The Avalon Project and ask yourself what there is that is disagreeable in it.