How can we downsize the debt and deficit spending at all levels of government? This should be a matter of urgent bipartisan agreement, because the current trajectory is unsustainable. The bloated federal government, along with far too many local entities and states, have fallen into the habit of spending much more than incoming tax revenues.
SAUSD recently ended up with a deficit of $180 million and is forced to lay off almost 300 teachers and other personnel. Does the district believe that it can still receive the same funding now as it did six or seven years ago after losing 11,000 students? Large cuts must be made when the size of the district has shrunk by nearly 25 percent.
On the federal level, there are some solutions to constant deficit spending. Currently, similar to other debt-ridden nations, the United States urgently needs shock treatment on the road to balanced budgets.
First, the government must resolve that expenditures don’t exceed revenues. It also means that several sacred cow agencies must be pared down to their bare essentials in providing effective services that aren’t duplicated in other agencies. Too many federal departments are riddled with paper shuffling and pencil-pushing bureaucratic obstacles.
Next, some federal departments could either be streamlined or even eliminated. Departments such as Agriculture, Education, Energy, Health and Human Services (HHS), Housing and Urban Development (HUD), and Labor could be turned over to the states and handled far more effectively. Moreover, unless foreign aid is fully vetted on both ends, it could disappear down the black hole of abuse, fraud, and waste.
The founders wanted to restrict federal power. They believed that the primary roles of the federal system were the application of the law, regulation of commerce, relations with other nations, and national security, currently the Departments of Commerce, Defense, Justice, and State. Other transactions were relegated to local or state governing bodies, or the private sector.
Third, in order to reduce the deficit and tackle the national debt, deregulation and tax reform ought to be front and center. Fewer regulations and tax cuts for businesses and individuals could trigger an economic boom of innovation that would increase the GDP and reduce unemployment. Nearly full employment would translate into less of a need for social services such as food stamps, subsidized housing, and welfare.
Fourth, America should return to imposing tariffs on goods and services, especially on nations that flout the accepted rules of commerce through dumping of cheap products and intellectual property theft. Prior to 1913, the Internal Revenue Service (IRS) didn’t exist. Government revenue was collected via tariffs on goods. Tariffs can raise the prices on certain products, but this can be offset by decreasing costs on other goods. Moreover, we could decouple much of our trade with China and turn to nations that adhere to fair and free trade. America could pivot from a trade deficit to a trade surplus.
Fifth, some of the actions taken at the federal level could be replicated at the local and state levels in coping with debt. States and local governments that run up large deficits could return to the core missions of government. For example, in California, spending could focus on firefighting, water resources, and public safety instead of the bullet train, homelessness, and lawless migrant services.
Debt reduction, correct fiscal priorities, and wisely utilizing taxpayer dollars can lead to greater economic and national security. It can also save the taxpayers hundreds of billions or even trillions of dollars. The time to act was yesterday.
