How Do We Get The Deficit To Zero?

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  • 1. How Do We Get The Deficit To Zero? Or, “There is no such thing as a free lunch.” Paul M. Jones Mid-South Tea Party General Meeting Thursday, May 20, 2010
  • 2. Who Cares? • Portugal, Italy, Ireland, Greece, Spain (PIIGS) • Deficit spending for decades • Under Euro, cannot inflate • Can’t borrow any more • IMF bailout, austerity measures • Strikes, riots in response
  • 3. Greek Riots
  • 4. 2010 Federal Budget • Revenues: $2,165,000,000,000 • Spending: $3,721,000,000,000 • Deficit: $1,556,000,000,000 • (source: http://www.whitehouse.gov/omb, table S-4; graphic from Heritage)
  • 5. Big Numbers • Count to a million: 11.57 days • Count to a billion: 31.68 years • Count to a trillion: 31,688 years • Count the deficit: 49,306 years
  • 6. Human-Scale Numbers • Revenues per household: $18,276 • Spending: per household: $31,406 • Deficit per household: $13,130 • (source: http://www.tampabay.com/opinion/ columns/washington-will-spend-31406-per- household-this-year/1086283, via Heritage)
  • 7. Fiscal Responsibility • Raise taxes by 72% per household, keep spending in place • Cut spending by 44% per household, keep taxes in place
  • 8. What To Cut? • Earmarks • Foreign aid • Farm subsidies • Bailouts • IRS • ???
  • 9. It’s Not Enough Per Household Social Security/Medicare -$9,949.00 Defense -$6,071.00 Antipoverty -$5,466.00 Unemployment -$1,640.00 Interest on the debt -$1,585.00 Veteransʼ benefits -$1,052.00 Federal employee retirement benefits -$1,018.00 Education -$914.00 Highways/transit -$613.00 Health research/regulation -$550.00 Mortgage credit -$470.00 Everything else -$2,078.00 Total spending -$31,406.00 Total revenues $18,276.00 Deficit -$13,130.00
  • 10. It’s Not Enough Per Household Social Security/Medicare -$9,949.00 Defense -$6,071.00 Antipoverty -$5,466.00 Unemployment -$1,640.00 Interest on the debt -$1,585.00 Veteransʼ benefits -$1,052.00 Federal employee retirement benefits -$1,018.00 Education -$914.00 Highways/transit -$613.00 Health research/regulation -$550.00 Mortgage credit -$470.00 Everything else -$2,078.00 Total spending -$31,406.00 Total revenues -$21,486 $18,276.00 Deficit -$13,130.00
  • 11. Draconian Example • Keep all taxes • Cut everything except ... • Social Security/Medicare • Defense • Antipoverty • Debt Interest • $4795 deficit
  • 12. The (Hard) Solution • Not enough to demand low taxes • Not enough to cut spending “in general” • Need to cut spending in the most popular (i.e., most expensive) programs • By large amounts (44% on average)
  • 13. Volunteers? • Who will volunteer to take the hit? • Social Security? Medicare? Food stamps? • Reduced defense? Veterans? Retirees?
  • 14. Social Issues • Sexy, emotional, compelling: • Immigration enforcement • Abortion • Gay marriage • Drug war • “Others are doing wrong.”
  • 15. Fiscal Issues • Deficits spending is not sexy ... • ... but with deficits, we follow PIIGS. • After a debt crisis, social issues will pale. • We are doing wrong.
  • 16. What We Can Do • Send back the free lunch • Politicians do what they get rewarded for • Tell politicians to cut spending 44% ... • ... especially our favorite programs ... • ... and re-elect them when they do! • Cutting “billions”? Not serious.
  • 17. The Things We Love Per Household Social Security/Medicare -$9,949.00 Defense -$6,071.00 Antipoverty -$5,466.00 Unemployment -$1,640.00 Interest on the debt -$1,585.00 Veteransʼ benefits -$1,052.00 Federal employee retirement benefits -$1,018.00 Education -$914.00 Highways/transit -$613.00 Health research/regulation -$550.00 Mortgage credit -$470.00 Everything else -$2,078.00 Total spending -$31,406.00 Total revenues -$21,486 $18,276.00 Deficit -$13,130.00
  • 18. Truth ... • Not fair; violates expectations • 44% sooner, or 100% later • Inflation, confiscation, collapse • Constitution ignored now? Wait until US bankruptcy. (Argentina 2001)
  • 19. ... or Consequences
  • 20. Conclusion • Cutting spending is a true sacrifice • Lives, fortunes, sacred honor • A 44% reduction in spending now ... • ... or Greece later
  • 21. • Paul M. Jones • http://paul-m-jones.com • pmjones88@gmail.com • @pmjones