THINKING ABOUT THE STATE OF THE BUDGET
William R/ Collier Jr.

President Obama’s budget is out, and, boy, is it a treat for the idealist dreamer who thinks that he can imagine a possible future, detached from all reality and laws of cause and effect, and impose that as an experiment, by the stroke of a pen, on 300 million hapless souls!

I must agree with the old yarn, “it is a curse for a nation to be led by a theorist!”

Here are some of my thoughts, not about the budget per se, in its details, I don’t like getting lost in the trees of arguing over this or that THING. Hopefully they will “provoke a reaction”, whether you agree or disagree.

First, you have to know what your principles are, and you have to know how human nature works, some basic laws of economics and how nations thrive or don’t, and you have to know some laws of cause and effect that will enforce themselves remorselessly, regardless of your idealism or your intentions.

I think it goes without saying that this budget is out of sync with the spirit of Constitutional Law, it is a Keynsian approach based on flawed assumptions, and it is the polar opposite of the mood of the electorate.

If we wanted to create a “more perfect union” and have a “government of the People” and all that, then creating a budget that raises the TAXING of the population, through the shell game of “deficit spending” (deficit spending IS taxation, ALL spending TAXES the People, if not now, soon enough) and that effectively renders more Americans dependent on the POLITICAL MACHINE of Big Government and Big Business for help or even jobs, is the exact OPPOSITE of how you would set up a budget.

I have a nice rule of thumb- when more than 1/2 of all taxes (all fees, taxes, regulatory costs) are mandated by the central power you do not have a federation, you have a centralized state and ALL centralized states both create dependent classes and are themselves a parasite that slowly sucks the life out of the whole nation.

Like the first rule of thumb, I have a second rule of thumb.

It goes like this: when more than 15% of the economic process is a response to government mandates then every step towards a higher percentage of government mandated costs/taxes and etc. is a step away from individual liberty because, to be blunt, “he who has the gold makes the rules.”

As we consider this “budget” we need to remember the BIG elements of the budget, because the smaller items we often quibble over can be best handled only after we attack the larger problem, in my opinion.

I saw an interesting piece, by a Big Government apologist, reminding us that, contrary to what most people are aware of, something like 2/3rds of the Federal Budget goes for defense, social security, and Medicare/Medicaid.

Let’s do some “emergent thinking” on the three BIG items:

On defense- I think we are bloated, top heavy with an unacceptable ratio of combat versus non-combat personnel and we are saddled with a procurement system that is not really free market based. as to the ratio of combat versus non-combat, I think it’s well over 70% non-combat- ideally we should be 70% combat versus 30% non-combat. As to procurement, here’s an example: the cost of weapon systems is rising at a much higher rate than inflation and than the cost of similar technologies in the civilian sector. An M1 Tank now costs $1 million to overhaul and $3 million to build, a 300% increase in cost since 1997! The electronics suites and computers are much better, but similar technologies are cheaper, not more expensive, relative to 1997 for the civilian market.

On social security- we use the single-most inefficient system known to man to provide for social security that has no real opportunity, at all, to grow at a rate of interest that is close to market averages and we raid that fund all too often.

People will scream bloody murder if they hear the word “privatize”, but we need to make Americans aware that Social Security CANNOT be an entitlement, it can only be a benefit, and that the money is ours. We have to show people that WANTING things a certain way without knowing how they really work is not policy, it’s selling snake oil. Anybody who says social security can be or should be an entitlement is selling you snake oil, plain and simple, and we need to be smart enough to know that just thinking “people should be able to fly” will NOT allow any of us to grow wings!

On Medicare/Medicaid- I think we lost some ground during the health care debate in that the public now perceives that seniors want to keep Medicare/aid because “it’s working” when, in reality, it is not working. We need a BOLD new approach. I know of a plan that is being worked on that would restore free market control/competition while ensuring that people get health care, but I cannot share the details yet. I would also suggest we look into how we certify health professionals and educate them, how top-heavy the degree process is for medical professionals, and alternative systems including stages of certification, apprentice programs, and public funding options for technology and/or training specialized personnel.

We seem to be batting at symptoms and not touching the core issues and the core problems:

1. debt is bad, bad, bad, period, and never good: Keynes was wrong and his ideas lead to disaster
see http://www.carmine-gorga.us/id18.htm a book called “The Economic Process” by a colleague of mine, Dr. Carmine Gorga, who rips Keyne’s theory apart and exposes its logical fallacies

2. free trade is good but having a negative balance of trade is bad- the fundamental reasons for this is our self-constricting energy policy (see Senator Demint’s “All of The Above” energy solutions) and the over regulation and Unionization of manufacturing which, together, have introduced the economics of entitlement over the economics of merit and thus created artificial costs and excessive costs of entry

3. fiat currency that is not, at the least, truly accountable to market forces and which adds costs that are not necessary for production or distribution of goods or services but which feed the bureaucracy, as opposed to a gold-backed currency (note- what you THINK you know about this you probably DON’T, a gold back currency can be implemented and it would wipe out our debt, without defaulting on loans, quickly.).

I think we need to come up with a different sounding narrative, not simply “government does too much” and I think we need to recognize, and tap into, the fact that over 60% of all Americans do not trust “big government OR big business”, we need to differentiate between FREE MARKETS and the iconic “big business” that people imagine is holding a monopoly of power and controlling the state (it doesn’t matter if this image is not factual, it is “so real” that we are not going to easily overcome it and we cannot ignore it).