There is a phrase floating around Washington nowadays that kind of bugs me.
It’s not a new phrase, but it seems to be in the midst of a
revival. It first popped up during the
President’s State of the Union Address and since then I have heard it bandied
about by Democrats and Republicans alike.
The phrase is: “Non
Defense Related Discretionary Spending.”
Ok.
So, what does that mean exactly?
Well, basically, it’s talking about our massive Federal budget and how we keep
spending more each year than we are taking in.
This is a problem.
It’s actually a really really big problem.
You see, we’ve been spending more money than we’ve been
taking in for years now and it’s kind of turned into a financial disaster.
Let’s think of it this way. Let’s think
about our national budget as an American family: The Joneses.
And to make it simple, we’re going to use easy math. Let’s say that the Joneses make a total of
$100,000 dollars a year.
Not bad, huh?
That’s the husband and the wife both working and little
Timmy earning some money from his paper route.
Altogether: 100K.
Ok, you know how you read about how the average American has
a ton of credit card debt? Some
estimates say that the average family has $10,000 in credit card debt.
That’s bad. That’s really bad, because
with interest and whatnot, they’re going to be paying for years and the
interest alone adds up to a significant chunk of that family’s budget.
So the average family has $10K in credit card debt. That’s 10% of their total income for the
year.
If the Joneses, our American government family had debts
that were 10% of their annual income, that would be bad…. But manageable.
The Joneses do not.
They have a debt slightly higher than that.
The Joneses take in $100,000 a year, but they have a credit
card debt of $500,000!
That’s 500% of their annual salary. Think about that! Think about what it would mean if you had a
mastercard that was carrying a balance that was 5 times what you make each
year.
Scary, huh?
Each year, our government takes in 2.5 trillion dollars, but we have a debt of
almost 12.5 trillion.
And what makes matters worse. Even though the Joneses have a debt that is
five times their annual income, they keep spending more and more every single
year. So even though they only make
$100,000 they spend $120,000 every year!
You see, the Joneses aren’t off by just a little, they are
off by a ton – 20% to be exact.
So next year, they will have a debt of $520,000 and the year
after that $540,000. And it keeps going
up. In fact, in the last 40 years, there
have only been 4 years where the Joneses didn’t spend more than they made (late
90s, under Bill Clinton). And whenever
the debt gets higher, the Joneses have to pay more money just to cover the
interest, which means they have less money to do all the other things they were
doing, which means they have to charge more to the credit card each year just
to maintain their lifestyle.
Now, I think we can all agree, that the Joneses are horrible
horrible and incredibly stupid people.
I mean how do you get that far in debt and think that it’s
going to be ok?
These people need Suze Orman like nobody’s business.
Ok. So how can we help these idiotic Joneses? How do you get out of a hole where you owe 5
times as much as you earn and each year you STILL spend too much?
Well, the first thing to do (and I’m no economist here) is
to stop spending so damn money!
Of course, that’s easier said than done and here’s where
that whole “Non Defense Related Discretionary Spending” thing comes in.
You see, there are certain expenditures that the Joneses
HAVE to pay each year. They don’t have a
choice.
The government has certain costs that are locked in by
law. One is payment on the debt. If we don’t keep paying the interest on the
debt, China will come over
and repossess California. (I know, I know, it doesn’t seem like such a
bad thing, but I’ve got family who live there and besides, I don’t think eating
lunch at “China Pizza Kitchen” sounds as tasty.)
In addition to the debt, most of what is called
“entitlement’ spending is locked in.
This is stuff like Medicare and Social Security and all that other good
stuff. There is a federal law that
congress must pay for that each year. So
we can’t touch that. Now we could do
things like raise the retirement age so that less people were on Social
Security, or we could cut the kinds of benefits that they received, but then
the old people would march on Washington brandishing canes and bags of
Werther’s Originals and disembowel all of our congressman, and we wouldn’t want
that…… Ok, there are times when you think you want that, but, come on, you
don’t really….. do you?
Ok, so we have to pay the interest, we have to make sure the
old people can get Viagra and watch Family Feud. And there’s other legally mandated spending
such as salaries for government employees and food stamps and stuff like
that.
So, all of those things are non-discretionary spending. We don’t have any discretion over whether we
spend it or not. We have to. Think of it
as stuff like the mortgage and the car payment and taxes.
Those are locked in costs.
You have to pay them, or you end up living in a box.
For the Joneses (our metaphorical government family) these
locked in costs total about 62% of their budget.
Almost 2/3 of the Joneses budget is going toward stuff they can’t change (at
least not easily and without really causing some problems)
That’s about $75,000 (because remember, the Joneses aren’t
operating on a budget of the 100K they take in, they are operating on a budget
of the 120K they spend each year.)
This leaves $25,000 dollars of discretionary spending that
they have money for. Of course,
remember, they are actually spending $120,000 a year, so there is actually $45,000
of discretionary spending and they need to cut it by 45% just to break even, if
they actually want to start paying off that monster debt, they need to cut it
by even more than that, let’s say by at least 50%.
So, we need to cut $22,500 out of the Joneses crazy
budget.
Alright. I know that
this seems like a lot, but I’ve got faith in us, let’s give it a whirl.
What makes this hard though, is that all of that
discretionary spending isn’t just going to lottery tickets and Haagen Dazs,
it’s going to good stuff, like food and school supplies and gasoline.
You see, that “discretionary spending” includes everything
else that the government does, such as building roads, funding education, researching
cancer, maintaining Yosemite National Park, jobs programs, college loans and
funding the military.
Sure, there’s some things that can be cut. And sure, every year, some idiot congressman
gets some kind of stupid pet project built in his home state, but the reality
is that this petty stupid stuff is pennies of that $45,000 and that each of those
stupid pet projects, no matter how asinine is giving someone a job.
Now, there is no question that there is waste in the federal government, but
every single cut, even the wasteful ones is going to hurt someone. Some person will lose a job, or some family
will lose the ability to pay for college.
Even the stupid expenditures are helping someone.
So these cuts are not going to be easy.
And remember, we’ve got to cut $22,500.
Holy crap!
Ok, remember how I started all of this out talking about the
phrase “Non Defense Related Discretionary Spending?”
Ok, well what the Obama was saying was that he can only cut
“discretionary spending” (none of that Medicare / Social Security stuff). Ok, but discretionary spending includes
“defense related spending” (the army, homeland security, B2 bombers etc.) Now, since we all support our troops, the
president is saying that we can’t cut any “defense related” discretionary
spending either.
Ok, I kind of get that.
And so does everyone else, apparently, because on all of the
talk shows and political venues everyone is talking about the need to cut “non
defense related discretionary spending.”
Ok, here’s the problem.
We’ve got to cut $22,500 out of $45,000.
Our defense related spending is $27,600.
Anyone see any problems here?
Even if we cut every single non defense related program in this country. That means if we sent no more money to
schools, we close NASA, we don’t give a dime to other countries, we cancel
college loans, we stop paving roads and travel on dirt, we don’t fund any
medical research, we shutter the Center for Disease Control, we close all of
our national parks, give Big bird the axe, close down the FBI and run
lawless. Even if we do all of that. Even if we eliminate everything in America that
makes us great, save for taking care of the old people, fully funding our
military and paying the interest on our debt, we still run over budget by
$5,000.
And you know there is no way in hell we will ever eliminate
all of that other stuff. Because as much
as everyone likes to bitch and moan about the government we all really like
roads and education and museums and parks and cheap food and not dying of lead
poisoning and having someone making sure that China isn’t selling us poisoned
baby formula.
We actually love what our government does for us and many
people, literally, could not live without it.
So, let me ask you this? With a budget
and a debt this screwed up, why is the military a sacred cow?
I understand terrorism and I DO remember 9/11, but do you
honestly believe that the way the military spends its three quarters of a trillion
dollars each year is being spent without any waste?
Is there no room for cuts?
Is it not possible to shave off the extraordinary amount of
money we are spending on planes and missiles and sending troops overseas?
I don’t want to rehash the questionable decisions that got
us into Iraq, or the questionable decisions that keep us in Afghanistan, even
though the military believes that there are less than 100 al Qaeda in
Afghanistan.
http://abcnews.go.com/Blotter/president-obamas-secret-100-al-qaeda-now-afghanistan/story?id=9227861
I don’t know enough about Terrorist machinations to
personally re-direct our military. I
dare say none of us do (possibly including the military) but I do know that we
have spent almost a trillion or so dollars in Iraq
where no al Qaeda existed and are now spending another fair penny in Afghanistan to
take out a few dozen.
Now, I believe that we need a strong defense. We need a mighty military. We need a well funded and vigilant homeland
security, but we also need roads and schools and food for the hungry.
I am not saying we should stop funding the military nor that
I want the air force to hold that apocryphal bake sale to buy their bombers,
but I do believe this whole heartedly:
There is waste and bloated expenditures in the military in
the same way there is waste and bloated expenditures in every other area of
government and I suspect it is even worse in the military because they have
been given a blank check to do what they pleased.
In fact, in the last several budgets, congress has decided,
as a matter of political posturing, to give the military MORE money than they
asked for in their budget.
Think about that. The
military, who knows, they will pretty much get whatever they ask for, asks for
a quarter of the US budget and then the congress, says, “oh sure,” take all
that, oh, and here’s a little extra just in case.”
The military has become the spoiled teenager of the Jones
family. Sure, we need to take care of
Timmy. We need to give him new shoes and
a computer and maybe even one of those Wii games, but does he need to drive a
Ferrari to high school? Wouldn’t a Ford
Focus be plenty?
Ok, I’m sure I’ve just pissed a lot of people off, but here’s
the bottom line. Our country is screwed
and we have to fix it.
We must get our spending under control. And if anyone was willing to be honest, they
would have to admit that the only solution will be from a combination of
increased taxes and reduced services. We
have been living in excess for too long and it is time to be responsible.
And it will be hard, but in this difficult situation, there
should be no sacred cows. The military
has more room to cut than many other departments and I think they should
participate.
Let’s cut discretionary spending. Let’s do something to fix our runaway
entitlement spending, but don’t take Defense spending off the table.
When there is a family crisis of this proportion, we all
need to participate.
And yes, the military cuts will hurt.
Bases will be closed, jobs will be lost, factories will be shuttered,
but this is true with every cut in the government budget and there is not a
doubt in my mind that the military can make those cuts without even coming
close to sacrificing our safety. The cuts
must be made wisely, but I am confident that the military is wise enough to
know what is fat and what is muscle and where the trimming needs to be done.
I think the pain of budget cuts should be shared across the
board of all discretionary spending. And
I think Congress needs to put on its big girl panties and figure out how to cut
our non-discretionary spending as well.
It will be hard. It
will be painful. But it is necessary and
we can not wait much longer.
Because judging by history, the only way to get our budget
under control, create a surplus and start paying down the debt is for Mrs.
Jones to divorce Mr. Jones and to marry Bill Clinton.
And I don’t think anyone really wants that.
Well, except, maybe Hillary.