A Fiscally Sound Constitutional Republic — or Slavery?Submitted by legalizeliberty on Fri, 02/11/2011 - 12:09
Since the election in November 2010, there's been plenty of talk about cutting the federal budget. The Cato Institute, for example, has come up with a $1.056 trillion proposal to cut federal spending. Newly elected U.S. Senator Rand Paul (R-Ky.) proposes to cut $500 billion from the federal budget. Other Republicans are now vacillating over whether or not to fulfill their campaign promise ("Pledge to America") of at least $100 billion in budget cuts.
However, none of these budget-cutting proposals will actually balance the federal budget. Using the statistics of fiscal 2010, which are more difficult to fudge than budgetary figures for the current and future fiscal years, here are the relevant macro-economic numbers for 2010 federal spending and revenue:
For fiscal 2010, Congress planned to spend $3.721 trillion. But federal revenue was only $2.165 trillion. Which means that in order to match spending with revenue, it would have been necessary to cut . . . wait for it . . . $1.556 trillion of planned federal spending.
Notwithstanding any recent executive branch attempts to manipulate statistics in order to shrink the gap between spending and revenue, this gap is unlikely to have changed significantly for fiscal 2011, and so the budget-cutting proposals of the Cato Institute ($1.056 trillion), U.S. Senator Rand Paul (R-Ky.) ($500 billion), and the Republican Party ($100 billion) simply aren't large enough to match spending with revenue. The yawning gap between spending and revenue is like the proverbial elephant in the room: Generally speaking, no one wants to talk about it, even though everyone is aware of its presence.
If we are going to take back control of our Constitutional Republic — without raising the national debt ceiling, and before our economy is overwhelmed by the delayed, tsunami-like effects of the Federal Reserve's hyper-inflation of our paper currency from 2008 to the present — we will have to cut the proportional equivalent of $1.556 trillion per year during the remainder of this fiscal year's federal budget.
What to do? The longer we put off the painful task of matching spending with revenue, the more painful it will be. In other words, NOW is the best possible time to stop the downward spiral toward national bankruptcy — before our economy collapses, and before we lose our national sovereignty. Remember, the basket-case countries currently making headlines in Europe had many opportunities to balance their budgets, but they chose repeatedly to put it off, to kick the can down the road — now look where they are.