Deficit Largest Since WWII

Almost two years ago, President Barack Obama announced that he would cut the budget deficit in half by the end of his first term. He insinuated that he meant the budget deficit that he was left with, a $1.3 trillion monster that he “inherited” from the Bush administration. That would mean cutting the deficit to $650 billion by 2012. If his most recent budget proposal is any indication, the president is not going to fulfill that promise.

The new budget has a deficit of $1.65 trillion, or nearly 11% of GDP, levels not seen since WW II. But during the war, Americans were financing the debt, buying War Bonds and treasuries. Today that money is coming from the Fed printing press and from foreign nations. Neither of those sources are sustainable.

There is a complete lack of leadership from Congress and the White House. The big four must be reformed, reduced, and repealed. Medicare, Medicaid, Social Security and Defense spending all must face massive overhauls if this country will see the light of day on its debt anytime soon. The administration acts as if the first three don’t exist, and as though weapons systems and troop levels are the only place to cut in the military.

Not only does the president plan to do nothing to rein in entitlement spending, but he plans on raising taxes through 2012. America’s businesses get hit the hardest with $300 billion in new taxes on the biggest job creators in the country.

The worst of it is that the liberal media is showering the budget with praise. The New York Times calls the budget “encouraging,” and say that it “makes a number of tough choices to cut the deficit by a projected $1.1 trillion over 10 years.” What happened to cut in half by 2012?

The budget calls for adding another 5,100 agents to the IRS over the next year and increasing the IRS budget by 9% to $13.28 billion. So expect more audits to look for loose change, the president is going to need it.

If the president and Congress are serious about deficit reduction they should get started now, not in ten years as the budget proposes. The same hard choices will be in front of future politicians that are in front of the spineless crowd today. There is really only one set of solutions available that may save the country from fiscal hardship. Privatize Social Security, turn Medicare and Medicaid over to the states and begin a phased withdrawal of U.S. troops from foreign soil. That hits the big four budget busters in the jaw and gets the country headed toward fixing its fiscal mess.

There are plenty of other ways to cut the budget that politicians are loathe to consider because it would mean less pork flowing back to their districts. A drawdown in Cold War positioning of the military, meaning the closure of many bases that serve as nothing more than pork funnels today, would be a good start for the military. Pulling out of NATO and the U.N. would be good for both the sovereignty of the U.S. and for the budget too. NATO has failed the U.S. in Afghanistan, and the U.N. is a worthless shell compared to the vision it was supposed to realize.

Shutting down the Departments of Education and Labor would also improve government immensely, neither has a constitutional mandate or could not be run more effectively at the state level. Term limits in Congress and a junking of the current tax code in favor of an elimination of the corporate tax and those on dividends, interest and estates could round out a successful remodeling of the U.S. government.