Why Tea Party won’t get a balanced federal budget

BY ROY NERSESIAN

COMMENTARY

The anticipated Federal budget deficit for this year has already grown from $1 trillion to $1.1 according to official sources and may end up as high as $1.7 trillion. Suppose that you’re a true conservative, maybe even a Tea Party supporter, and want to get the Federal budget under control. Where do you start cutting the fat?

Social Security is the biggest item. Well, your mother is on social security – she’s a widow, so you can’t cut social security – that’s 20% of the budget off limits to the pruning knife. Military is 19% – where can you possibly cut there? The 50,000 troops in Germany defending Germany against whom? The 30,000 in Japan defending Japan against whom? Oh, maybe the troops in Japan are defending South Koreans. South Korea has 2 ½ times the population of North Korea and is 40 times larger in terms of economic activity – the need for us to defend South Korea is self-evident. Obviously the Japanese and South Koreans are incapable of defending themselves, so we have no right to ask that they pay us for services rendered. Right? We can go through the military list one by one and there’s not a penny that can be saved other than perhaps cutting veterans’ benefits.

The next 16% is unemployment, welfare, and other mandatory spending. “Mandatory” is an interesting word – it means it legally can’t be cut, so why are we bothering? We know that illegal aliens on welfare cannot be separated from deserving Americans who’ve been down on their luck since the day they were born – that’s outright discrimination. And Uncle Joe, who lost his job and may lose his house, are we going to cut him off?

So far 55% of the budget is off limits. Let us proceed. The next 21% is Medicare and Medicaid combined – where to take the cut? How about the Children’s Health Insurance Program, they can’t vote their displeasure. Now we are up to 76% that can’t be cut. The next 5% is interest on the national debt – talk about a mandatory expenditure. The way government debt is spiraling out of sight, it is only a matter of time before foreign holders of government securities demand a real rate of interest as the price for continued holding of paper of diminishing value. On that day when we actually have to pay real interest, this mandatory expenditure can easily double if not triple, propelling the debt spiral into a death spiral.

With 80% of the budget inviolate to the pruning knife, we are left with the billions spent on farm subsidies at a time when farmers are receiving record prices for their crops, billions paid to the oil industry, which we all agree are in desperate need of additional funding. Maybe we can reduce some secretarial pool from a dozen to maybe 11 and then hire one part timer to make up the work.

It is quite obvious that balancing the budget will require a degree of political intestinal fortitude that no one in Congress possesses. The other alternative is raising taxes – that’s as much political suicide as cutting the budget. Besides, raising the tax rate to 100% still doesn’t balance the budget. To balance the budget, confiscation would have to be instituted and we all know what that means.

So folks, there we have it. We’re trapped in a budgetary deficit that will drive the dollar to zero – pretty paper with which to blow your nose and wipe your butt. And there’s nothing that can be done about it because we ruled out both budget cuts and tax increases. We’re trapped in a downward spiral to financial oblivion. Forget the escape to gold. What good is a gold coin worth a zillion dollars when a zillion dollars can’t buy a loaf of bread that doesn’t even exist. By the way, you won’t have a zillion dollars to buy the last loaf of bread because you’ll have to pay taxes first on your ill-gotten gains! And lest we forget, this nation has a history of confiscating gold.

And one last thought for you to ponder. Total government debt in 1980 was $1 trillion. It took us 200 years, a revolution, a ruinous civil war, two major world wars, and one giant depression to push total indebtedness past $1 trillion. Now that’s what we’re adding to the national debt each year and the annual deficits are widening, not narrowing. Comforting thought, ain’t it?

Roy Nersesian, a resident of Maplewood, teaches at the Leon Hess School of Business at Monmouth University in West Long Branch and also at the Center for Energy and Marine Transportation at Columbia University. He has authored several books, the last on Energy for the 21st Century published by M.E. Sharpe.