A Greece-Like Fiscal Crisis Looms

Wednesday, 22 Feb 2012 12:20 PM

By John Stossel

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Imagine this family budget: Last year, you earned $24,700. But you spent $37,900, incurring $13,300 in debt, and you were already $153,500 in debt.

So you say, “I promise I’ll spend $300 less this year!”

Anyone can see that your cutback is pathetic and that you need to spend much less.

Yet if you add eight zeroes, that’s America’s budget.

The president says again that he will cut spending — but don’t be fooled. He wants to spend more on some items, those he euphemistically calls “invest(ment) in the things that will help grow our economy.” (As though politicians can know what a free market would reveal.)

He says he wants to reduce the deficit by raising taxes on the rich — but again, don’t be fooled. Even if he took every penny over $1 million from the rich, it would reduce the deficit by only $616 billion.

The politicians are spending us into oblivion. But I can’t blame only them. The American people are complacent. We like the goodies. We think we're getting something for nothing. We are like alcoholics who know we have a problem but just can’t resist one last fix. One more infrastructure bill or jobs plan will jump-start the economy. Then we’ll kick our spending addiction once and for all.

But we don’t stop spending. Almost all budget categories grow, even when adjusted for inflation. This is a break with most of America’s history. When the economy grew most dramatically, government was less than 5 percent of gross domestic product. Today, it’s well over 20 percent.

Since Lyndon Johnson’s War on Poverty began in the late 1960s, government spending has gone up relentlessly. This is just not sustainable. So what do we do? We must cut. But I fear Americans aren’t up for that. People on the street told me that the budget is out of control. But when I then asked them, “What would you cut?” most just stared ahead.

But there’s plenty to cut. We can easily cut things like foreign aid, NPR, Amtrak and post office subsidies, and the war on drugs. But we should not pretend that such cuts would be enough to stop the coming crisis. They’re not. Killing Fannie Mae and Freddie Mac and a hundred other subsidy programs would help more. But that still makes only a dent in the deficit.

To really save America, we need to cut whole departments: Commerce, Energy, Education, Agriculture, Labor. We don’t need them.

Commerce just happens. It doesn't need an expensive Cabinet department that hands out money to politically connected businesses.

The same is true for the Energy and Agriculture departments. Some states now have more agriculture bureaucrats than farmers!

Education is not a federal responsibility. Federal spending of $106 billion a year has not raised test scores one bit.

Now I’ve cut $329 billion. It’s still not enough.

The military is about a fifth of the budget. I want to support our troops, but we could do that and save money if the administration would shrink the military’s mission to what it is supposed to be: protecting us from external threats. We cannot put America on a road to solvency without cutting military spending, too.

Of course, what will really bankrupt America are entitlements, especially Medicare. That’s the big one.

Why even call it an entitlement? Are we entitled to the money? People think we are, but the money is taken from the taxpayers — by force. The program is totally unsustainable. We now live so long that most of us get back about three times what we paid into these programs.

So we have to raise the retirement age, maybe index it to life spans, and turn Medicare into an insurance plan that sustains itself. That will mean that if I want the latest in high-end medicine, I have to pay for it myself.

We’re on the way to becoming Greece — while our “leaders” stand and watch. A catastrophe is happening before our eyes, but the politicians won’t act to avert it. How did they ever end up with enough power to sink our society?

John Stossel is host of "Stossel" on the Fox Business Network. He's the author of "Give Me a Break" and of "Myth, Lies, and Downright Stupidity."

















© Creators Syndicate Inc.

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