December 12, 2010
Balancing the Budget - Michigan Could Blaze the Trail
My very good friend Chuck Eglinton, who's the founder of BidRobot.com and ChuckEgg.com, sent me a link to a story in the Detroit Free Press yesterday. It appears it might not be too hard to wipe out Michigan's $1.7B (billion) deficit.
I've talked about this in past posts of mine here at the Fire Pit. But my knife would cut far deeper. I'm still a proponent of a 35 percent pay and benefit cut to all Federal employees, except for anyone in uniform. After all, those in the military are why I'm allowed to write these words and you're able to read them.
Chuck sent me the link to the Detroit Free Press story at the end of a conversation we were having about my Dream Act post from two days ago.
When we first started talking, Chuck commented that he understands why some politicians want to have illegal aliens pay taxes to help fund the entitlements for the aging USA population. Chuck is in favor of giving productive illegal aliens a fast track to become Americans by attending college or serving in the military, as was suggested by the "Dream Act," but he isn't necessarily in favor of allowing non-productive illegal aliens participate in entitlements that they don't deserve.
Our discussion was centered around some facts in a book by Harry Dent called
The Great Depression Ahead: How to Prosper in the Debt Crisis of 2010 - 2012. These facts are not new, it's just that most politicians up until now have buried their heads in the sand about the aging US population. They don't want to pay the toll at the voting booth each November.
The bottom line is that if the current entitlement programs, as well as that horrid Health Care Bill signed into law in March of 2010, continue in their current form, the cost to pay for them will be on the shoulders of a smaller group of working Americans.
Chuck commented that as the US population ages, the older folk won't be paying as much in taxes, but they'll likely still need infrastructure to survive. In the history of the world, it's always been the new young workers who pay taxes. They're the ones that typically create innovation and drive the economy.
He further stated that retirement is a ponzi scheme, and with our declining birth rate we need young people from somewhere to shore up the Madoff Madness we now have.
Chuck and I talked about what happens in the real world when expenses start to get bigger than income. In most instances, people cut back on spending except for the bare necessities to survive.
We're at that point here now in the USA. We're in the survival mode and don't try to fool yourself.
Of course I bristled at Chuck's position to have the illegal aliens help pay for our sins. If I remember correctly, they wouldn't be illegal, as Chuck would like to see some sort of amnesty as proposed in the Dream Act. It's important to note that Chuck had yet to bring up to me what Mike Bishop was proposing in Michigan.
Here's what I said in the call. I propose a three-pronged attack to solve the looming entitlement crisis, as well as much of our deficit woes. Have I got the hard numbers to ensure it will work? No, but by gosh if Michigan can do it, we can go a long way to solving our financial issues by manning up to them. Here's my rough outline:
Step 1. Repeal the monster Health Care Bill and deliver the bad news to USA citizens that Chris Christie's been doing in New Jersey. We're going to have to make significant changes to Social Security and Medicare. The bottom line is that many US citizens are going to have to get fewer benefits and work much longer.
Step 2. STOP crazy spending on crazy pork-barrel projects. Just as in real life when time gets tough you don't go out to eat, you don't go on the expensive vacations, etc. We need to STOP spending money on all things that are NOT essential until such time as we get the debt paid way down and the economy running on 12 cylinders.
Step 3. Initiate my pay cuts to government employees. If they don't like it, they can resign and scratch out a living with the rest of us here in the private sector.
Do these three things and I guarantee you that we can balance the budget, or get darn close, like Michigan is going to do.
Let the Comments begin!