EXPOUNDING ON COST CUTTING (I)

Why do I seem to want to throw the baby out with the bathwater? I don't. I just want us to be a little realistic about what "our" government is doing with the money they took from you, whether you wanted them to or not.

The vast majority of the federal government's spending programs are the results of special interests holding power over key decision makers (i.e. politicians). Do I really think veteran's benefits should be cut? No, I just want a choice. I can donate to Wounded Warriors Project if I want to, but when my income is taken from me, that choice taken from me is made by someone else. There are quite a few federal programs that I do not support on a variety of levels besides the fact that they are paid for with money that was stolen. On my own, I may want some portion of my income to go toward funds for needy students, charities that assisted the disabled and children of single-parent households, or even give to foundations I trust that give research grants to promising scientific ventures.

But I want to pay for those things. I do not want to force you to pay for them if you don't share my sentiment.

On the other side, I do not approve of funding for network surveillance, agricultural subsidies, all of the mind-blowingly insane miscellaneous spending, social security (which I will talk about later), infrastructure, energy subsidies of all types, foreign defense subsidies (i.e. our massive defense budget that spends billions on overseas assets), the department of Housing and Urban Development, the Environmental Protection Agency, the Department of Homeland Security, the Department of Education, and many, many others. Here are some reasons why I do not support these programs:

-Infrastructure constitutes our roads, bridges, airports, sewage systems, water delivery systems, high-tension power lines and substations, and other "integral" parts of our economy and our life. All can and have been provided at a lower cost and a higher quality in the private sector.

-The regulatory departments I mentioned either do not to enough regulation, do too little regulation, or do exactly the amount of regulation that would be paid for and demanded by market entities. The FDA is notoriously lax on it's food regulatory policies, prompting food service providers to hire private organizations to perform health checks on their produce. The EPA tends to over regulate small and mid-sized businesses and under regulates larger businesses. This is usually because of a process known as "regulatory capture."

-The removal of housing, agriculture, and other subsidies needs very little justification. The market demands are certain level at a certain quality of all of these things. We make and receive clothing, cars, and computers on the market at lower and lower prices with higher and higher quality over time. Industries that receive federal (or other government) subsidy tend to have artificially lower prices with stagnant or even diminishing quality over time. There are economic reasons for this, of course. There are also a myriad of unintended and undesirable consequences of subsidies of particular sectors over others, in addition to the fact that taxes must be taken to pay for them and will almost necessarily result in dead-weight loss for consumers (I will explain a little later).

That's all for now. If you want additional information on my reasoning I can provide it.

What does the dog have to do with it?

The dog is Scrooge McDog. He likes putting his money to good use so he is discerning about where it is kept and how to manage it, like most people. The quill pen is the lobbyists who infest DC asking for political favors for certain industries and groups. The stacks of gold represent former Texas congressman Ron Paul and his crusade to cut spending and circulate competing currencies. The candle is what remains of Lady Liberty's torch in the midst of all this epicurean-level spending of other people's stolen money.

AXING SPENDING

Hello again! This post is about cutting costs in our glorious, beneficent, omniresponsible state. The United Sates is the largest single employer and the largest single organization in the world by revenues. As of right now, it has about a 600 billion dollar annual deficit of a 3.6 trillion dollar annual budget and an outstanding debt of a little over 18 trillion dollars as of today's date. Using accrual accounting methods, (the methods used by the private sector,) unfunded liabilities are stacked at just under 94 trillion dollars.

What does this mean?

It means that the United States is a very poor manager of its own finances. We can postulate a million reasons why this may be systemic, but we know it is systemic. The problem has only ever gotten worse and is projected to continue to worsen. This is a graph of the US Debt:GDP ratio.

The X-axis is time and the Y-Axis is the annual outstanding debt as a percentage of annual economic output. It's teetering on 100% of output as of now. In other words, the amount of money the US owes to its bond holders (i.e. US citizens, foreign governments, foreign citizens, corporations, etc.) is equivalent to the amount of output the US produces in one year. If the government decided to tax 100% of our income in 2015 we would just barely be able to pay off our outstanding debt. Lots of us graduate from college with debt we can't pay off in one year though. So how about a federal payment plan?

Payment plans assume that you stop accruing debt and start paying it off, in increments. We have not stopped accruing debt since 2002. The United States needs to stop its borrowing before it can pay back what it already owes.

Luckily, however, interest rates are very low right now. The Federal funds rate is near 0%, and treasury bond yields are also at record lows. This means that for the next few years, the interest that accumulates on the 18 trillion dollars owed to the nation's creditors will be at the lowest rates in history. Now is the PERFECT time to pay down the principle we owe.

What do we cut?

Everything. Especially roads, care for single mothers, border protection, veteran's benefits, government worker pensions, food and drug protection agencies, environmental protection agencies, nuclear arsenal maintenance agencies, defense spending, DARPA, medicare and medicaid, social security, and anything else I left out. And roads. I hate roads.

But... I could be convinced to keep foreign aid, the national endowment for the arts, and the Transportation Security Administration.

What does the dog have to do with it?

This one is obvious. The stump is spending. The ax is my soul. The dog's left paw is Ayn Rand and the dog's right paw is Margaret Thatcher. The dog's smile represents the masochistic joy derived from the scrooges and corporate liquidators of the world when cutting costs and increasing profits.

The funny thing is that you think I'm not serious. It gets better. I'll tell you more later.

IRONING OUT THE KINKS

As my first blog post, I think it's important to outline how exactly I intend to waste the memory banks that keep this blog visible to viewers like you. This blog is designed to appeal to the average internet user who, in my mind, likes cute animals, bizarre humor, and pointless political debate.

As such, each post will include a picture of a dog doing something a human might do. The image will encapsulate a concept which will loosely relate to a topic of political significance. Please realize, reader, that I have no idea what I am doing.

In spite of not knowing what I am doing, I do have an idea of the topics about which I'll be typing. As an economics major, my posts will mainly pertain to issues concerning economics, but will, of course, include some good old fashioned politics as well. It is your duty as a good citizen to harshly criticize my work.

Speaking of good citizens, most people would consider me as such. Ironically, I am an anarchist at heart. This most likely does not mean what you think it means, however.

Sir, what do you mean by "Anarchist," then?

I mean that I am against the initiation of the use of force against persons or their property and am against the threat thereof. Taxation rests upon the initiation of force (and not as a form of self-defense). We know this because we (as citizens of, say, the United States of America) will be imprisoned if we refuse to pay taxes or killed if we refuse imprisonment.

What about the Social Contract?

I never signed anything like that. If Walmart decides to dump some groceries on my lawn one day, I am under no obligation to pay for them, even if Walmart expects me to use the groceries. We would find it absurd and laughable if we received an invoice for the groceries we never ordered. Unfortunately, the only difference between the aforementioned scenario involving Walmart and our good 'ol nation-state referred to as the US of A is that the US of A will back up their invoice with a police force legitimized by the monopoly they hold on the creation of law. Taxes fund nearly every aspect of the government. It is for that reason that I tend to hold the consistent "oppose" position to every government program or initiative that somehow finds itself on the voting ballot. Although I do not vote. More about that later.

What does the dog have to do with it?

The dog represents the might of the people claiming to manifest the "state" and the "iron" is the "iron fist" that is used to keep us in line... Look, I'm not a communist, I'm just trying to find an apt metaphor. Hopefully these will get better.